US stocks rallied on Thursday, thanks to rising US Treasury yields. Dow is up 159 points or 0.5%, while the S&P 500 and Nasdaq 100 rose by 0.5% and 0.6%, respectively.
China's removal of some of its restrictions against a number of companies returned some optimism to the market, while Ant Group's IPO signals that Beijing may be easing its crackdown on tech companies.
But by the end of yesterday, Dow fell 269.24 points (0.81%) to 32,910.90, while S&P 500 lost 1.08% and closed at 4,115.77. Nasdaq also fell 0.73% and ended at 12,086.27.
The US will release its May data on inflation, but before that investors will already try to find any signs of an even greater slowdown in economic growth. The report is also expected to be slightly below April's figures, which will indicate that inflation has peaked.
But the bond market has a slightly different point of view as the yield on 10-year Treasuries exceeded 3%. This indicates that investors are betting on the further active tightening of monetary policy in the United States
Oil prices also jumped to a 13-week high, with WTI increasing 2.26% and trading at $122.11 a barrel. This news makes the likelihood of a soft landing by the Fed smaller, not to mention many investors expect an almost full-blown recession next year.
The report on US jobless claims is due out today, along with data from Nio, DocuSign and Rent the Runway.
Premarket:
Target rose 1% in premarket trading, after announcing a 20% dividend increase. Target will increase its quarterly payout to $1.08 per share from 90 cents.
Novavax fell 5.3% in premarket trading, after news that the FDA is likely to delay approval of its Covid-19 vaccine. An FDA spokesman said the agency needed to review changes to the company's manufacturing process.
Intel has announced a hiring freeze as it prioritises spending amid global macroeconomic uncertainty. The move came amid falling demand for personal computers around the world.
Tesla jumped 3.2% in premarket trading, after UBS upgraded the stock to Buy from Neutral, saying the stock's recent decline provided an attractive entry point given the strong operating outlook.
Technical picture of the S&P 500
If bulls continue to act more aggressively and do not let the trading instrument go below $4,122, the immediate target will be the resistance level of $4,157. But the beginning of this week may make some adjustments to the market, especially to the observed bullish trend. This means that a breakthrough of $4,157 will push a new active movement up to $4,197 and $4,234, while a lag at $4,122 will lead to a sell-off towards $4,089. A further decline below this will quickly push the S&P 500 to new lows at $4,050, $4,013 and possibly $3,975.
