(Bloomberg) — Stocks dropped amid warnings from Federal Reserve officials on the need for more stimulus to lift the world’s largest economy from a coronavirus-induced recession. The dollar climbed.
The S&P 500 came off session lows, but was still down on Wednesday, led by energy producers, retailers and technology companies. Fed Chairman Jerome Powell reiterated that there’s a long way to go for the economic rebound, which will likely require more support. Vice Chairman Richard Clarida alongside regional central-bank chiefs Charles Evans and Loretta Mester also cited the importance of fiscal policy to bolster the recovery. Fed Bank of Boston President Eric Rosengren offered a pessimistic view on the economy’s ability to bounce back quickly without further aid.
“Markets are digesting and grappling with this idea that the growth expectations that investors have might not materialize,” said Lauren Goodwin, economist and multi-asset portfolio strategist at New York Life Investments. “As the fiscal impulse in the U.S. starts to wane, some of these expectations for a slow and steady recovery are shaken.”
On corporate news, Tesla Inc. dragged down the Nasdaq 100 after its “Battery Day” event fell short of expectations. The Dow Jones Industrial Average outperformed on solid earnings from Nike Inc. and a rally in Johnson & Johnson amid its first big U.S. trial of a Covid-19 vaccine that may work after just one shot.
These are some events to watch this week:
Powell and Treasury Secretary Steven Mnuchin will testify before a Senate committee on the economic response to the pandemic on Thursday.U.S. initial jobless claims are due Thursday.
Here are some of the main moves in markets:
Stocks
The S&P 500 decreased 0.6% at 1:09 p.m. New York time.The Stoxx Europe 600 Index rose 0.6%.The MSCI Asia Pacific Index fell 0.1%.
Currencies
The Bloomberg Dollar Spot Index increased 0.4%.The euro fell 0.2% to $1.1682.The Japanese yen depreciated 0.4% to 105.40 per dollar.
Bonds
The yield on 10-year Treasuries gained two basis points to 0.69%.Germany’s 10-year yield was unchanged at -0.51%.Britain’s 10-year yield climbed two basis points to 0.218%.
Commodities
West Texas Intermediate crude rose 0.8% to $40.13 a barrel.Gold depreciated 1.8% to $1,866.53 an ounce.Silver depreciated 5.5% to $23.06 per ounce.
For more articles like this, please visit us at bloomberg.com
Subscribe now to stay ahead with the most trusted business news source.
©2020 Bloomberg L.P.
