US Stocks Rally Hard After Data – Nasdaq Up 2.9%
U.S. stock markets rallied strongly yesterday after better-than-expected weekly unemployment claims helped calm the market during a volatile week. The Nasdaq led the charge, closing the day up 2.87%, closely followed by the S&P, which added 2.30%, and the Dow, which gained 1.76%. U.S. Treasury yields also pushed higher, with the 2-year yield gaining 4.3 basis points to move above 4% to 4.044% at the close, and the 10-year yield adding 3.4 basis points to reach 4.001%. Oil prices jumped again as the data alleviated demand concerns in the U.S., and conflict in the Middle East intensified. Brent crude rose 1.06% to $79.16 per barrel, while WTI increased by 1.28% to $76.19 per barrel. Gold also had a stellar day, driving higher off recent lows to gain 2% on the day, closing the New York session at $2,427 per ounce.
Oil in Focus as Middle East Conflict Concerns Increase
Oil prices continued to rise after stronger-than-expected U.S. data helped alleviate demand concerns, while tensions in the Middle East escalated. Although the U.S. data supported a strong move in stocks, many traders are more focused on the potential for a significant escalation in the conflict in the Middle East. The market is bracing for retaliatory strikes from Iran after the deaths of senior Hamas and Hezbollah leaders in the past week. Traders expect oil prices to spike if escalation occurs, with many mapping out different impact scenarios depending on the extent of the retaliatory strikes. This weekend is seen as a critical period for potential political developments.
More Market Moves Expected into the Weekend
Markets experienced more roller-coaster rides in trading sessions yesterday, with Wall Street closing well in the black after stronger-than-expected weekly job numbers lifted the major indexes. Chinese data will be in focus during the Asian session, with key CPI and PPI numbers due to be released. Expectations are for a 0.3% year-on-year increase in the headline CPI print. European trading sessions have been largely devoid of significant data releases this week, and today is no exception, leading to a long wait for traders for the next major update. The New York session will turn its focus north of the border for Canadian employment data, with Canadian dollar traders appreciating that this data will be released on its own, offering a smoother trading reaction than usual when it’s typically accompanied by U.S. employment data.
