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Stocks rebound as yields and oil prices fall

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  • Gold and Oil Futures Fall as Bitcoin Rises
  • Dollar gains ground in volatile session

NEW YORK, May 10 (Reuters) – Shares on Wall Street rebounded on Tuesday and U.S. Treasury yields fell as oil prices fell amid fears over inflation and slowing economic growth in the world.

US Treasuries rallied, with the yield on the benchmark 10-year note falling from a more than three-year high to below 3% as the market reassessed the outlook for inflation a day before the data release. the US consumer price index (CPI).

U.S. crude oil futures fell below $100 a barrel to their lowest level in two weeks as the demand outlook clouded by coronavirus lockdowns in China and growing recession concerns, while a strong dollar made crude more expensive for buyers using other currencies. Read more

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Markets were volatile across all asset classes amid soaring inflation and fears that monetary tightening aimed at slowing price increases could lead to slower global economic growth.

Last week, central banks in the United States, Britain and Australia raised interest rates and investors braced for further tightening as policymakers grappled with soaring inflation.

After dipping in the red for about two hours, the S&P was solidly bullish for the last time in the day, unlike Monday’s furious selling. Technology, the fastest growing sector in the market, led the gains as investors reacted to falling bond yields.

“If we’ve seen the worst of the rate of change in long-term interest rates, that could allow equities to do a bit better,” said Sameer Samana, senior global markets strategist at Wells Fargo Investment Institute in St. Louis.

The Dow Jones Industrial Average (.DJI) rose 14.43 points, or 0.04%, to 32,260.13, the S&P 500 (.SPX) gained 26.46 points, or 0.66%, to 4,017.7 and the Nasdaq Composite (.IXIC) added 183.51 points, or 1.58%, to 11,806.75.

The pan-European STOXX 600 index (.STOXX) closed up 0.68% while the MSCI gauge of stocks across the world (.MIWD00000PUS) last rose 0.31%.

Matthew Miskin, co-head of investment strategy at John Hancock Investment Management, was reassured by policymakers, including Cleveland Federal Reserve Bank President Loretta Mester. While Mester said unemployment could rise and growth could slow, she added that the tightening should not cause a “sustained slowdown”. Read more

“They’ve been so hawkish that the market wants to sniff it out at any little move,” Miskin said. “When it comes to feelings, a lot of people are looking for surrender. The dots aren’t fully connected for that yet.”

The U.S. dollar was choppy on Tuesday as it held near a two-decade high ahead of a key reading on inflation that could give some insight into the Fed’s policy trajectory. Read more

The dollar index rose 0.203%, with the euro down 0.23% at $1.0531. The yen weakened 0.09% to 130.38 to the dollar, while the pound last traded at $1.2322, down 0.07% on the day.

Oil prices fell in volatile trade as the market balanced looming European Union sanctions on Russian oil with demand concerns over China’s coronavirus lockdowns, a strong dollar and growing recession risks .

US crude recently fell 3.41% to $99.57 a barrel and Brent was at $102.30, down 3.44% on the day.

“There’s probably some demand destruction and sticker shock at those levels. The other part is what’s happening in China. The longer it lasts, the more it takes the pressure off tight inventory levels,” he said. said Wells Fargo’s Samana.

Earlier data showed China’s export growth slowed to its weakest level in nearly two years as the central bank pledged to step up support for a slowing economy. Read more

Benchmark 10-year notes last rose on 32/26 to 2.9771%, up from 3.079% Monday night.

Spot gold fell 0.5% to $1,844.31 an ounce. Elsewhere, Bitcoin rose 5% after falling to its lowest level since July 2021. Tuesday’s gain recouped some losses from its 11.8% plunge on Monday. Read more

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Additional reporting by Herbert Lash and Chuck Mikolajczak in New York, Elizabeth Howcroft in London; Editing by Bradley Perrett, Raissa Kasolowsky, Alexander Smith and Nick Macfie

Our standards: The Thomson Reuters Trust Principles.

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