The S&P 500 and the Dow Jones indexes retreated from record levels yesterday, as investors geared up for the start of the corporate reporting season and a key inflation report later this week. A pullback in the benchmark 10-year bond yield from 14-month highs in April eased worries about higher borrowing costs, helping richly valued technology stocks gain ground and drive the S&P 500 and the Dow to record levels. Among the 11 major S&P 500 sectors, technology and communication services shares were the top decliners. U.S. consumer price data for March and $271 billion of U.S Treasury auction this week could end a recent lull in the bond market, reigniting a rise in yields that worried investors in the first quarter. Federal Reserve Chair Jerome Powell on Sunday said the U.S economy is at an “inflection point” with expectations that growth will pick up speed in the months ahead, but also risks if a hasty reopening leads to a continued increase in coronavirus cases.
Dow Jones Industrial Average
The Dow Jones Industrial Average lost 0.16%. The biggest gainers of the session on the Dow Jones Industrial Average were Dow Inc., which rose 1.05% or 0.66 points to trade at 63.80 at the close. Walgreens Boots Alliance Inc. added 0.96% or 0.52 points to end at 54.70 and Nike Inc. was up 0.89% or 1.21 points to 136.66 in late trade. The biggest losers included Intel Corporation, which lost 4.18% or 2.85 points to trade at 65.41 in late trade. Apple Inc. declined 1.30% or 1.74 points to end at 131.26 and Boeing Co shed 1.13% or 2.86 points to 249.50.
NASDAQ 100
The NASDAQ index declined 0.36%. The top performers on the NASDAQ Composite were Wilhelmina which rose 35.74% to 7.13, Celcuity LLC which was up 29.17% to settle at 27.90, and Lucira Health Inc. which gained 26.54% to close at 10.87. The worst performers were Tian Ruixiang Holdings Ltd which was down 79.58% to 17.90 in late trade, iRhythm Technologies Inc. which lost 39.56% to settle at 80.24, and Canaan Inc. which was down 29.89% to 13.09 at the close.
Oil
Oil prices climbed as data from China showed the world’s second-largest oil consumer’s import growth surging and on tensions in the Middle East after the Yemen-based Houthi movement said it fired missiles on Saudi oil sites. U.S crude oil futures gained 28 cents, or 0.5%, to $59.98 a barrel. China’s exports grew at a robust pace in March in yet another boost to the nation’s economic recovery as global demand picks up amid progress in worldwide COVID-19 vaccinations, while import growth surged to the highest in four years. Crude oil imports into China also jumped 21% in March from a low base of comparison a year earlier as refiners ramped up operation amid robust fuel demand as the COVID-19 pandemic eased. Also supporting prices, U.S crude oil stockpiles were expected to have dropped last week for a third straight week, a preliminary Reuters poll showed. Still, U.S oil output from seven major shale formations is expected to rise for a third straight month, climbing by about 13,000 BPD in May to 7.61 million BPD, the U.S Energy Information Administration said yesterday.
Precious and Base Metals
Gold fell yesterday as an uptick in U.S Treasury yields dimmed bullion's appeal, while investors awaited key U.S inflation and retail sales data for cues on economic health. Spot gold was 0.5% down at $1,734.31 an ounce. U.S gold futures eased 0.6% to $1,734.60. The bond yields have stabilized right now, but they (elevated yields) are still an underlying negative for the metals markets that produce no dividend or yield. The bulls lost a little bit of momentum and that is prompting shorter-term technical traders to press the sell side, putting prices under pressure. Benchmark U.S Treasury yields edged higher yesterday before the Treasury Department's sale of $96 billion in new three-year and 10-year notes, and ahead of key data releases this week, including consumer price inflation. Retail sales data is also expected on Thursday. Higher yields have threatened gold's appeal as an inflation hedge as they increase the opportunity cost of holding bullion, which pays no interest. Federal Reserve Chair Jerome Powell, in comments that aired on Sunday night, said the U.S. economy was at an "inflection point," with hopes of more growth and hiring in the coming months, but he also cited risks of a spike in COVID-19 cases if there is a hasty reopening. A new Fed framework builds in allowances for inflation to run above the central bank's 2% target for a time without the Fed intervening to rein it in. Gold is likely to benefit if inflation rises much higher than the target. If we do start seeing inflation accelerating and people start thinking interest rates are going to go up again, then gold might struggle a bit. Among other precious metals, silver fell 1.6% to $24.84 per ounce, palladium was up 0.4% at $2,650.98 and platinum slipped 2.1% to $1,173.87.
Traditional Agricultures
Corn futures gained 0.7% yesterday, rising for a fourth session in five and trading near an eight-year top, underpinned by strong demand and expectations of lower supplies. Wheat lost ground on forecasts of higher production in the world’s biggest exporter Russia. U.S. corn supplies will shrink by more than previously forecast due to rising demand from the ethanol, livestock feed, and export sectors, the U.S Agriculture Department said on Friday.
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