[1/2]People are seen on Wall Street outside the New York Stock Exchange (NYSE) in New York City, US on March 19, 2021. REUTERS/Brendan MacDiarmid/File Photo Obtaining licensing rights
NEW YORK (Reuters) – U.S. stocks rose and the dollar fell on Monday as investors awaited inflation data due on Wednesday and the Bank of Japan hinted it may move toward closing the door on an era of negative interest rates.
All three major U.S. stock indexes rose modestly in early trading, rebounding from the previous week’s net losses, with electric car maker Tesla Inc (TSLA.O) providing the biggest upside support.
“September is a seasonally tough month for stocks, but overall, things are looking better than people feared,” said Oliver Burch, senior vice president at Wealthspire Advisors in New York. “We are unlikely to see the high levels of conviction from investors that would send the market higher this month. There is also no reason to be unduly fearful.”
The relatively quiet session appeared to be the calm before a storm of US economic data this week, with Wednesday’s crucial consumer price report being important.
Analysts expect that inflation rose last month, driven by higher oil costs. The core CPI, which excludes volatile food and energy prices, is expected to decline year-on-year.
The upcoming CPI data will give market participants a snapshot of inflation in August, and could provide some illumination regarding the duration of the US Federal Reserve’s restrictive policy cycle.
The Fed, which left the door open to further rate hikes, pledged to remain flexible in its response to economic data.
Financial markets essentially paused interest rates at the conclusion of the September 19-20 monetary policy meeting, after which the path becomes less certain, according to CME’s FedWatch tool.
Elsewhere, comments by Bank of Japan Governor Kazuo Ueda raised the possibility that Japan may begin to move away from the era of negative interest rates.
The Dow Jones Industrial Average rose 126.62 points, or 0.37%, to 34,703.21 points, the Standard & Poor’s 500 Index rose 20.71 points, or 0.46%, to 4,478.2 points, and the Nasdaq Composite Index increased 67.71 points, or 0.46%. 0.49% to 13829.24.
European stocks rose amid signs of economic stability from Beijing, as investors eye the European Central Bank’s policy meeting on Thursday along with the US CPI report.
The European STOXX 600 Index (.STOXX) rose 0.41%, and the MSCI Worldwide Stock Index (.MIWD00000PUS) rose 0.56%.
Emerging market stocks rose 0.45%. MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) closed 0.38% higher, while Japan’s Nikkei (.N225) lost 0.43%.
The dollar fell against a basket of global currencies, as traders looked for upbeat signs of an economic “soft landing,” while the yen rose after Ueda’s comments.
The dollar index (.DXY) fell 0.59%, with the euro rising 0.48% to $1.075.
The Japanese yen rose 1.01% against the dollar at 146.35 to the dollar, while the British pound last traded at $1.2543, up 0.63% during the day.
US Treasury yields rose in anticipation of the CPI report.
The benchmark 10-year note fell 8/32 to yield 4.288%, from 4.256% late Friday.
The 30-year note fell 23/32 to yield 4.3753%, from 4.332% late Friday.
Oil prices reversed their previous decline and resumed their rise on supply concerns stemming from Saudi and Russian production cuts.
US crude rose by 0.14% to $87.63 per barrel, and Brent crude recorded $91.04 in recent transactions, rising by 0.43% during the day.
Gold prices rose against the dollar.
Gold in spot transactions increased 0.2 percent to $1,922.50 per ounce.
Steven Kolb reports. Additional reporting by Amanda Cooper in London, Editing by William MacLean
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