U.S. major averages rebounded, Treasury yields held steady, and crude oil prices fell. European markets closed down amid election jitters in the UK and France. The Japanese yen's weakness signals lower lows for the embattled currency. The Chinese premier reiterated the annual economic growth target and dismissed economic decoupling risks.
U.S. tech stocks took a much-needed breather after rising for two months in a row as investors rotated into energy stocks and banks. European markets closed higher, but French political turmoil weighed on the market. The Japanese yen fell to a three-decade low, testing the Bank of Japan's resolve to defend the currency.
The U.S. indexes headed higher to new highs ahead of the release of retail sales and housing market updates this week. Nvidia, Broadcom, and Apple led the advance in tech stocks. European markets attempted a rebound after sharp selloffs last week. China's improving consumer spending was overshadowed by the deepening malaise in the property sector.
Benchmark indexes are set to advance higher in Friday's trading, and indexes closed at record highs in four previous sessions in a row. Receding inflation expectations, moderating but tight labor market conditions, and steady economic growth are supporting earnings expectations for the current quarter and year.
ADBE RH
ADBE RH
The latest update on producer price inflation raised hopes that overall inflation may finally reach the Fed's target rate of 2% after stalling above 3% for a year. The European Union imposed additional tariffs on electric vehicles made in China. The Bank of Japan is widely expected to hold rates steady and continue to purchase government bonds.
Produce price inflation slowed in May, and a day ago, a report showed consumer price inflation rose less than expected. Investors bid up stocks in the hope that the waning inflation pressures may give more headroom to policymakers to approve at least one rate cut before the year is over.
PLAY AVGO OXM
PLAY AVGO OXM