Stock Market Rebound Following Wall Street Turbulence; Treasury Yields and Dollar Decline

Stock Market

Global markets experienced a recovery on Thursday, as MSCI’s global stock index bounced back from a late sell-off in the previous session. Concurrently, Treasury yields and the U.S. dollar dipped in anticipation of a crucial U.S. inflation report scheduled for release on Friday.

Oil prices, which had surged earlier in the week due to concerns about shipping disruption in the Red Sea, declined on Thursday following Angola’s announcement of its departure from the Organization of the Petroleum Exporting Countries (OPEC).

On Wednesday, Wall Street witnessed its most significant drop since September, possibly influenced by hedging activities associated with trading in short-dated options, according to analysts. Quincy Krosby, Chief Global Strategist at LPL Financial, noted that the market was striving to recover, reflecting a prevalent fear of missing out and institutional money managers catching up with competitors.

Investors are closely awaiting the Personal Consumption Expenditure (PCE) index report on Friday, speculating on data that could confirm a decrease in inflation. Krosby suggested that if expectations lean towards a faster decline in core and super core inflation, investors might choose to act preemptively.

On Wall Street, the Dow Jones Industrial Average rose 0.65% to 37,321.25 points, the S&P 500 gained 0.75% to 4,733.4 points, and the Nasdaq Composite added 0.86% to 14,905.56 points.

In the broader context, the pan-European STOXX 600 index lost 0.22%, while MSCI’s global stocks gauge gained 0.50%.

The U.S. dollar declined to a three-day low against a basket of currencies, losing 0.498%. The euro strengthened by 0.47% to $1.0989, the Japanese yen gained 1.03% against the greenback, and sterling traded at $1.2656, up 0.15%.

In the bond market, benchmark 10-year U.S. Treasury notes dipped slightly, yielding 3.870%, and the 30-year bond’s yield was at 4.0095%. Gold prices rose as U.S. Treasury yields retreated, with spot gold gaining 0.7% to $2,042.89 an ounce, and U.S. gold futures rising 0.22% to $2,038.90 an ounce.

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