U.S. Stocks Drift as Traders Await New Catalysts: Markets Wrap

(Bloomberg) — U.S. equities rose on Wednesday as the tussle between economic optimism and inflation concern continued to play out in markets.

The S&P 500 gained, led by technology shares, as traders awaited fresh catalysts in economic data, including U.S. jobs data due later this week. AMC Entertainment Holdings Inc. also extended gains as retail investors continued to pump the stock after Mudrick Capital Management called it overvalued.

The dollar was stronger ahead of comments from Federal Reserve officials and the central bank’s Beige book release. WTI crude futures extended gains after closing at the highest since October 2018. Treasuries were also lower and Bitcoin gained.

As the U.S. economy continues to claw its way back from the pandemic, traders are looking for fresh signals on whether that growth will translate into inflation that ultimately prompts the Fed to withdraw support. Up next is Friday’s U.S. payrolls data, which will provide a clearer view of the state of the labor market — and hints on whether the central bank is likely to scale back its monthly asset purchases.

“It seems like they’re starting to lay the ground work for tapering,” Aaron Clark, portfolio manager at GW&K Investment Management, said of the Fed’s recent signaling. “So I think investors are just in a holding pattern right now. But I do think stocks are going higher.”

“Earnings from revenues and margin expansion are greatly underestimated, even though there have been revisions,” he added.

Here are key events to watch this week:

Philadelphia Fed President Patrick Harker, Chicago Fed President Charles Evans, Atlanta Fed President Raphael Bostic and Dallas Fed President Robert Kaplan speak WednesdayU.S. employment report for May on Friday

These are some of the main moves in markets:

Stocks

The S&P 500 rose 0.1%, more than any closing gain since May 26 as of 9:30 a.m. New York timeThe Nasdaq 100 was little changedThe Dow Jones Industrial Average rose 0.2%, climbing for the fifth straight day, the longest winning streak since May 7The Stoxx Europe 600 rose 0.2% to a record highThe MSCI World index was little changed

Currencies

The Bloomberg Dollar Spot Index rose 0.2%, more than any closing gain since May 26The euro fell 0.2% to $1.2188The British pound was little changed at $1.4155The Japanese yen fell 0.2% to 109.75 per dollar

Bonds

The yield on 10-year Treasuries declined one basis point to 1.59%Germany’s 10-year yield declined two basis points to -0.20%Britain’s 10-year yield declined two basis points to 0.80%

Commodities

West Texas Intermediate crude rose 0.7% to $68 a barrelGold futures were little changed

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