Chuck Mikolajczak
NEW YORK (Reuters) – Global stocks rose for the first time in three sessions on Monday, while U.S. Treasury yields rose after falling sharply the previous week as investors awaited comments from Federal Reserve officials.
On Wall Street, U.S. stocks rose after a sluggish start to the session, helped by gains in technology stocks.
Economic data showed manufacturing activity in the New York region improved in June but remained in contraction territory with a reading of negative 6. Investors will be closely watching May retail sales data on Tuesday for signs of improving consumer health.
“We don’t really have the desire to be real sellers right now because the feeling is that the momentum will continue and the stock will continue to rise,” said Danielle Hathorne, senior market analyst at Capital.com.
“The fact that the rally was driven largely by a select few stocks means the pullback could be even deeper.”
The index rose 180.08 points, or 0.47%, to 38,769.24, gained 49.82 points, or 0.92%, to 5,481.42 and gained 215.96 points, or 1.22%. to 17,904.84.
Goldman Sachs raised its year-end S&P 500 price target to 5,600 from a previous 5,200, and Evercore ISI raised its price target to 6,000 from 4,750.
U.S. stocks hit record levels last week after several inflation indicators suggested price pressures may be easing even as the Fed adjusted its economic forecasts to include just one rate cut for the year.
In Europe, stocks rose, with bank and technology shares recovering from losses last week after markets were spooked by political uncertainty in France. The index closed 0.09% higher, while the broader Europe index rose 2.52 points, or 0.12%.
MSCI’s index of shares across the world rose 4.38 points, or 0.55%, to 801.64, bouncing off previous lows and coming off two straight sessions of declines.
Fed OFFICIALS
U.S. Treasury yields rose, with the 10-year note suffering its biggest weekly drop of the year, in response to inflation data that raised hopes the Fed could cut rates by at least 25 basis points in September.
Markets are now pricing in a 63.3% chance of a 25 basis point rate cut in September, according to CME’s FedWatch Tool, up from about 70% in the previous session.
Benchmark 10-year U.S. bond yields rose 6.4 basis points to 4.277% from 4.213% late Friday.
“Empire State has helped a little bit, but it’s more than that,” said Stan Shipley, managing director and bond strategist at Evercore ISI in New York. “Yields fell a lot last week, so some people here are taking profits.”
Investors will hear from a number of Fed officials this week, including Gov. Lisa Cook and New York President John Williams on Monday.
Philadelphia Fed President Patrick Harker said Monday the central bank could cut rates once this year if its forecast comes true.
The central banks of Australia, Norway and the UK are expected to leave their interest rates unchanged at their meetings this week, although the Swiss National Bank could cut interest rates given the recent strength of the Swiss franc.
The index, which measures the dollar against a basket of currencies including the yen and euro, lost 0.22% to 105.31, while the euro rose 0.32% to $1.0734.
Against the Japanese yen, the dollar strengthened 0.19% to 157.67 and sterling strengthened 0.17% to $1.2704.
The stock rose 2.4% to $80.33 a barrel and rose to $84.25 a barrel, up 1.97% on the day, building on gains from the previous week as investors became more optimistic about demand growth in the months ahead. .