U.S. Stocks Climb, Bond Yields Stay Above 3%

Barry Adams
06 Jun, 2022
New York City

U.S stocks retained a positive bias after a week of losses but struggled in the afternoon trading after bond yields stayed above 3%. 

The yield on the 10-year Treasury note increased to 3.038%. 

The S&P 500 index jumped 0.3% to 4,121.45 and the Nasdaq Composite index advanced 0.4% to 12,061.73. 

Stocks gained after the Department of Commerce announced a pause on tariffs on solar power products imported from four countries for the next 24 months. 

Tariffs will be paused on solar panel modules and chips imported from Cambodia, Malaysia, Thailand, and Vietnam but existing duties on solar products from China and Taiwan will remain in effect, according to a statement from the Commerce Department. 

The Commerce Department added it will continue its investigation whether Chinese makers are circumventing U.S. duties by funning products through these neighboring countries. 

China loosened mobility and gathering restrictions after the coronavirus spread subsided. 

Crude oil inched lower 65 cents to $118.22 a barrel and international trading Brent crude crossed above $121.50 a barrel. 

Saudi Arabia announced a $2.10 a barrel increase to base price for the shipment of its leading Arab light crude to Asia  and increased premium to $6.50 a barrel. 

The price increase came only a week after a meeting of OPEC+ nations agreed to roll forward a three month increase in supply to two months totaling 648,000 barrel a day. 

Investors also looked ahead to the European Central Bank's policy meeting on Wednesday that may offer more clarity on the rate decision on July 21. 

Investors are battling multiple global shocks not seen in a century. 

Economies around the world are impacted by once a century pandemic, war in Europe after 75 years, and global food and fuel price surge lifting the inflation to a 4-decade high. 

In addition, central banks in Europe and the U.S. are set to lift rates after fifteen years or near zero rates or negative rates. 

Stocks reacted to company specific news. 

Spirit Airlines jumped 5.7% to $20.74 after JetBlue sweetened its bid to $31.50 a share and proposed to increase breakup fee to $350 million. 

Didi Global surged on news that Chinese authorities are concluding investigations of the company and the ride-hailing company will be permitted to add new users. 

The news was first reported by the Wall Street Journal. 

Apple Inc jumped 1.6% to $146.90 and the company is set to kick-off its annual Worldwide Developers Conference today. 

Apple announced a new MacBook, MacBook Pro, M2 Chip 

ON Semiconductor jumped 6.1% to $62.94, VICI Properties gained 6.4% to $31.39, Keurig Dr Pepper advanced 5.9% to $34.93 after three companies were selected to be included in the popular S&P 500 index.   

Under Armour declined 0.8% to $10.08 after the company's stock was dropped from the S&P 500 index. 

European markets traded higher after the U.S. proposed to roll-back tariffs on China products. 

The DAX index gained 1.4% to 14,655.95, the CAC-40 index rose 1.35% to 6,573.11, and the FTSE 100 index added 1.3% to 7,629.77. 

Asian markets advanced after China eased mobility restrictions as life returns to normal after two months of severe lockdowns to halt the spreading of coronavirus. 

The Nikkei index jumped 0.5% to 27,915.89, the Hang Seng Index soared 2.7% to 21,653.90, and the Sensex index edged down 0.2%. 

The Reserve Bank of India is set to lift its rate tomorrow by 50 basis points after inflation indexes jumped to eight-year highs. 

The ASX 200 Index dropped 0.5% to 7,206.30 and the broader All Ordinaries Index fell 0.5% lower to 7,433.10.

The Reserve Bank of Australia is also set to lift its benchmark interest rate between 25 and 40 basis points.