US stocks moved to a mixed finish on Monday and yields rose in the bond market as the election continues to drive volatility in financial markets around the world.
The Standard & Poor’s 500 index rose 0.3% to start a shortened four-day week that includes the Fourth of July holiday. The Dow Jones industrial average rose 0.1%, and the Nasdaq composite gained 0.8%.
Some of the world’s strongest action was across the Atlantic, where the CAC 40 index in Paris jumped as much as 2.8% before settling for a 1.1% gain. Results from France suggested that a far-right political party may not win a decisive majority in the country’s legislative elections. This raised hopes of a possible deadlock in the French government, which would prevent a worst-case scenario in which a far-right with a clear majority could push through policies that would greatly increase the French government’s debt.
It’s a big year for elections around the world, with voters heading to the polls in the UK later this week and elsewhere soon. In the United States, pollsters are measuring the fallout from last week’s debate between President Biden and former President Trump. All of this underlines “political polarization and how elections are shaping the economy, rather than the other way around,” according to Nick Gentle and other members of the product management group at Barclays.
Trump Media & Technology Group, whose shares have risen and fallen with Trump’s White House chances, rose 1% to $33.08. However, shares of the company behind Trump’s Social Truth platform are still well below their $70 range reached earlier this year.
The bond market was home to some of the strongest action in the US markets. Treasury yields rose again, as they did on Friday shortly after the Biden-Trump debate. Rising prospects for a Republican sweep in November sent traders back on the move from 2016, according to strategists at Morgan Stanley. In addition to the rate hike, traders also piled into oil and gas stocks and financial companies.
The yield on the 10-year Treasury rose to 4.46% from 4.39% late Friday and from 4.29% late Thursday. It’s a reversal of the general trend since the spring, when the 10-year Treasury yield had reached 4.70% in late April.
Yields have largely been easing on hopes that inflation will slow enough to persuade the Federal Reserve to cut its key interest rate later this year, from the highest level in more than two decades. High rates have hit the US economy by making it more expensive to borrow money for a home, car or anything else.
Hopes for a rate cut lingered after a report on Monday showed US manufacturing weakened last month by more than economists expected. Perhaps even more important to Wall Street, the report from the Institute for Supply Management also said price increases are slowing. Taken together, the data may provide more evidence that the Federal Reserve wants to see some easing of pressure on inflation before cutting rates.
This week’s economic highlight is expected on Friday, when the US government will say how many workers employers hired in June. Economists expect total employment to slow to 190,000 from 272,000 in May. That would bring the number closer to what Bank of America calls the “Goldilocks” figure of about 150,000, give or take 25,000.
At that level, the US economy can continue to grow and avoid a recession without being strong enough to put too much upward pressure on inflation.
On Wall Street, Chewy swung from a big early gain to a 6.6% loss after a widely followed trader named Keith Gill revealed he owned just over 9 million shares of the pet supply company. That’s about 6.6% of the entire company, according to a filing Monday with the Securities and Exchange Commission.
Gill rose to fame during the original meme stock craze of 2021, where GameStop rallied to market heights. Gill, who goes by “Roaring Kitty” and other nicknames, became the face of fans pushing GameStop up. Gill was back talking about GameStop recently, which helped boost its stock. But it fell 5.5% on Monday after Gill’s revelation about Chewy.
Elsewhere on Wall Street, Spirit AeroSystems rose 3.3% after Boeing said it would buy the maker of jets and other aircraft parts for $4.7 billion in stock.
Boeing, which rose 2.6%, has faced tougher scrutiny from the government and customers over concerns about safety and quality. Boeing previously owned Spirit AeroSystems, and the acquisition reverses a long-standing company strategy of outsourcing key work on its passenger jets.
Meta Platforms rose 0.1% after European Union regulators accused it of violating the bloc’s new digital competition regulation by forcing Facebook and Instagram users to choose between viewing ads or paying to avoid them.
Still, the S&P 500 rose 14.61 points to 5,475.09, even as 3 out of 4 stocks within the index fell. Gains for Meta and other large, influential companies, such as Nvidia’s 0.6% gain, overshadowed these losses.
The Dow gained 50.66 to 39,169.52, and the Nasdaq composite rose 146.70 to 17,879.30.
In stock markets abroad, Japan’s Nikkei 225 added 0.1% after a quarterly survey by the Bank of Japan called “tankan” showed a modest improvement in confidence among the country’s biggest manufacturers. Stocks in Shanghai rose 0.9% after mixed economic data.
Choe writes for the Associated Press.
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