Stocks Rise, Bond Yields Closer to Recession Warning

US stock indices rose at the open and bond yields were close to flashing a recession warning on Tuesday.

The tech-heavy Nasdaq Composite Index led the major indicators in early trading, gaining 1.1%, or about 158 ​​points. The Dow Jones Industrial Average rose 0.8%, while the S&P 500 gained 0.7%. on Monday, The main indicators rose After a volatile session, technology stocks led the gains.

Investors were watching Peace talks between Russia and UkraineWhich resumed in Istanbul on Tuesday for the first time in two weeks. Ukraine has indicated in recent days its openness to a neutral situation as part of a peace deal with Russia. The two sides described the talks, which did not result in a breakthrough, as constructive.

Stock indexes have rebounded in recent weeks, offsetting much of the losses that occurred in the wake of the Russian invasion of Ukraine. Investors showed calm despite concerns including multi-decade high inflation, a fresh Covid-19 shutdown in China and the Federal Reserve that started raising interest rates for the first time since 2018.

“It appears that the markets are becoming more comfortable with the idea that the picnic cycle is here, that it will not derail economic growth and that the stock markets are still the place to be,” said Altaf Kassam, Head of Investment Strategy for Europe. Middle East and Africa at State Street Global Advisors.

In the commodity markets, Brent crude, the international oil standard, fell by about 4.4% to $101.13 a barrel.

Nielsen Holdings

It rose more than 21% in early trading after the Wall Street Journal reported that a consortium led by Elliott Management and

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Brookfield Asset Management

was close to buy company for about 16 billion dollars.

The inversion of the US Treasury yield curve has been seen as a warning sign of a recession for decades, and it looks like it is about to light up again. WSJ’s Dion Rabouin explains why an inverted yield curve can be so reliable in predicting a recession and why market watchers are talking about it now. Illustration: Ryan Trevis

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LHC . group

It rose nearly 7% after United Healthcare He said she will gain Home Health Company for $5.4 billion.

Tesla

It rose about 0.8 percent, adding to an 8 percent rise on Monday after the automaker said it was Seeks shareholder approval to split its shares.

Meme’s stock has been giving up some of its recent gains, with

Jim Stop

down about 6.5% and

AMC Entertainment

About 0.6% less.

In Europe, auto stocks pushed the Stoxx Europe 600 Index up 1.9%.

Barclays

It fell 2.6 percent for the second day of losses after the bank Admit a mistake in selling debt That would cost $591 million.

Investors are watching the bond markets for a sign that many see as a harbinger of a recession. The yield on the benchmark 10-year note fell to 2.391% from 2.476% on Monday while the 2-year note yield rose to 2.342% from 2.340% at the previous day’s settlement.

When the yield of short-term bonds rises above the longer 10 years, it is known as a yield curve inversion, something that is sometimes considered an indicator of an upcoming recession.

“There have been more yield curve skews than in recessions, but every time there’s a recession, you can look back and find the yield curve inversion,” said Mr. Kassam.

Traders worked on the floor of the New York Stock Exchange on Monday.


Photo:

Nicole Pereira/The Associated Press

New York Federal Reserve Chairman John Williams is scheduled to speak later Tuesday, as investors are likely to analyze his comments for more clues about the central bank’s approach to raising interest rates. Mr. Williams said last week that it was Open for an interest rate increase of half a percentage point If the economy requires it.

In Asia, Japan’s Nikkei 225 Index is up 1.1% while Hong Kong’s Hang Seng Index is up 1.1%. In China, the Shanghai Composite Index fell 0.3%.

Write to Will Horner at william.horner@wsj.com

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