U.S. stocks traded near all-time highs and bonds rallied as investors braced for a key inflation report that could provide clues on the direction of monetary policy. The S&P 500 fluttered around its May 7 record closing level, with megacap technology and biotech stocks lifting the benchmark index. The 10-year Treasury yield retreated below 1.5% after an afternoon auction of the notes. Equities have been trading in a tight range and Treasury yields have been easing in recent weeks as investors who believe accelerating inflation will be short-lived clash with those those who bet it will prove persistent enough to warrant tightening. For now, the Fed’s dovish stance is calming the markets.
Six of the main 11 S&P 500 industry groups rose, led by health-care stocks. Johnson & Johnson Co., Merck & Co. Inc., Pfizer Inc. and Eli Lily & Co. were among the biggest contributors to the broader index’s advance. Biogen Inc. resumed a rally two days after getting regulatory approval for its Alzheimer’s drug. United Parcel Service Inc. tumbled the most in seven months after its profit-margin outlook disappointed investors.
The 10-year U.S. Treasury yield declined as much as 6.3 basis points to 1.471%. The yield held below 1.5% after an auction of $38 billion of the notes Wednesday afternoon. The 30-year bond’s yield touched 2.148%, last seen March 1.
The Stoxx 600 Europe Index increased 0.1%, closing at a record high as investors awaited key economic data and the European Central Bank policy meeting on Thursday for signs of whether the recovery is becoming overheated.
Stocks
The S&P 500 was little changed as of 2:45 p.m. New York timeThe Nasdaq 100 rose 0.3%The Dow Jones Industrial Average fell 0.1%The MSCI World index was little changed
Currencies
The Bloomberg Dollar Spot Index rose 0%The euro was little changed at $1.2180The British pound fell 0.3% to $1.4114The Japanese yen was little changed at 109.57 per dollar
Bonds
The yield on 10-year Treasuries declined five basis points to 1.49%Germany’s 10-year yield declined two basis points to -0.24%Britain’s 10-year yield declined four basis points to 0.73%
Commodities
West Texas Intermediate crude fell 0.4% to $70 a barrelGold futures were little changed
Source: FXPro