By Caroline Valetkevitch
NEW YORK (Reuters) - Stocks on global markets rallied on Friday and registered strong gains for the week as a recent slide in commodity prices eased worries about inflation and the rate hike outlook.
The S&P 500 climbed 3.1% in its biggest daily percentage gain since May 2020, and the MSCI global index rose 4.8% for the week, snapping three straight weeks of declines.
U.S. Treasury yields edged up from two-week lows.
Investors have been worried that aggressive interest rate hikes by the Federal Reserve and other major central banks to combat inflation could cause a recession, which would reduce demand for commodities and other items.
"The (stock) market came into this week oversold, so it was time for a bounce," said Quincy Krosby, chief equity strategist at LPL Financial in Charlotte, North Carolina.
"We've seen oil prices come down along with other commodity prices," she said, adding that the market's move is reflecting "expectations of at least a marked slowdown if not an out-and-out recession."
Also, the University of Michigan consumer sentiment survey's reading on five-year inflation expectations was positive for stocks, Krosby said. It eased to 3.1 from the preliminary 3.3% estimate in mid-June.
The benchmark S&P 500 last week confirmed a bear market.
The Dow Jones Industrial Average rose 823.32 points, or 2.68%, to 31,500.68, the S&P 500 gained 116.01 points, or 3.06%, to 3,911.74 and the Nasdaq Composite added 375.43 points, or 3.34%, to 11,607.62.
For the week, the S&P 500 rose 6.4%, the Dow added 5.4% and the Nasdaq gained 7.5%.
The pan-European STOXX 600 index rose 2.62% and MSCI's gauge of stocks across the globe gained 2.63%.
Benchmark copper on the London Metal Exchange was 0.5% lower at $8,367 a tonne after touching $8,122.50, down 25% from a peak in March and the lowest level since February 2021. Other industrial metals also tumbled.
Oil prices were higher Friday on but notched their second weekly decline.
On the day, Brent crude settled up $3.07, or 2.8%, at $113.12 a barrel, while U.S. West Texas Intermediate crude settled up $3.35, or 3.2%, at $107.62.
In the Treasury market, yields have dropped from more than decade highs reached before last week's Fed meeting. The U.S. central bank hiked rates by 75 basis points at the meeting.
Fed funds futures traders are now pricing for the benchmark rate to rise to about 3.5% by March, down from expectations last week that it would increase to around 4%.
Benchmark 10-year yields were last at 3.125%. They have fallen from 3.498% on June 14, the highest since April 2011.
In the foreign exchange market, the U.S. dollar fell and posted its first weekly decline this month.
In afternoon New York trading, the dollar index , which measures the U.S. unit against six major currencies, fell 0.2% to 104.013.
The U.S. dollar's slide boosted even commodity-focused currencies such as the Australian dollar and Norwegian crown. The Aussie rose 0.8% to US$0.6946.
Spot gold added 0.2% to $1,826.39 an ounce
Add Chart to Comment
We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
- Enrich the conversation
- Stay focused and on track. Only post material that’s relevant to the topic being discussed.
- Be respectful. Even negative opinions can be framed positively and diplomatically.
- Use standard writing style. Include punctuation and upper and lower cases.
- NOTE: Spam and/or promotional messages and links within a comment will be removed
- Avoid profanity, slander or personal attacks directed at an author or another user.
- Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
- Only English comments will be allowed.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.