Stocks rose after a tech rout, with traders weighing a mixed reading on inflation as big banks kicked off the earnings season.
The S&P 500 hovered near 5,600 after sliding almost 1% in the previous session. Smaller firms continued to outperform the megacap space. Banks were the worst performers. Wells Fargo & Co. sank 6% after warning it won’t be able to whittle away costs as fast as forecast. JPMorgan Chase & Co. fell 1.5% after missing on a few key metrics like net interest income. Citigroup Inc. dropped 2% as costs for the year are likely to be at the high end of the range previously provided.
Traders looked past data showing US producer prices climbed slightly more than forecast — as categories that are used to calculate the Federal Reserve’s preferred inflation measure, the personal consumption expenditures price index, were not that bad.
To Paul Ashworth at Capital Economics, the PPI was actually “a lot better” than it looks as components that feed into the PCE were reasonably benign.
Investors are also eager to hear from the largest banks about the state of the US economy and expectations for the rest of the year, including the potential impact of the presidential elections in November.
Treasury 10-year yields declined one basis point to 4.20%. The pound is trading at its strongest level in a year versus the dollar and the highest in almost two years against the euro. Japan likely stepped into currency markets prop up the yen soon after US inflation figures came out Thursday, according to a Bloomberg analysis of central bank accounts.
Corporate Highlights:
- AT&T Inc. suffered a massive hack of customer data — separate from one reported earlier this year — that included records of calls and texts for nearly all of its mobile-phone users for a six-month period in 2022, one of the biggest breaches of private communications data in recent memory.
- Boeing Co. has won an order for 35 of its 737 Max aircraft, including its largest variant, the Max 10, from the US aircraft leasing unit of Tokyo Century Corp.
- Deutsche Lufthansa AG cut its profit outlook for the full year and warned that breaking even at its namesake German unit will be “increasingly challenging” as it grapples with higher unit costs and falling ticket prices.
- Rio Tinto Group is studying proposals for potential bids for companies including Teck Resources Ltd., Sky News reported, citing people it didn’t identify.
- Novo Nordisk A/S’s Ozempic was linked to lower rates of dementia and a range of other mental problems in a University of Oxford study that raises expectations about the diabetes drug’s potential ancillary benefits.
- Samsung Electronics Co.’s largest union is now calling on employees at one of the company’s most advanced AI memory chip plants to walk off the job, switching tactics after their campaign for higher pay showed signs of losing steam.
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Some of the main moves in markets:
Stocks
- The S&P 500 rose 0.3% as of 9:43 a.m. New York time
- The Nasdaq 100 rose 0.2%
- The Dow Jones Industrial Average rose 0.4%
- The Stoxx Europe 600 rose 0.5%
- The MSCI World Index rose 0.2%
Currencies
- The Bloomberg Dollar Spot Index fell 0.2%
- The euro rose 0.2% to $1.0894
- The British pound rose 0.3% to $1.2960
- The Japanese yen rose 0.3% to 158.32 per dollar
Cryptocurrencies
- Bitcoin was little changed at $57,576.94
- Ether fell 0.5% to $3,099.36
Bonds
- The yield on 10-year Treasuries was little changed at 4.21%
- Germany’s 10-year yield advanced four basis points to 2.50%
- Britain’s 10-year yield advanced four basis points to 4.12%
Commodities
- West Texas Intermediate crude rose 0.5% to $83.06 a barrel
- Spot gold fell 0.5% to $2,402.22 an ounce
This story was produced with the assistance of Bloomberg Automation.