The dollar strengthened, Treasury yields rose and U.S. stocks rallied out of the gate Monday after progress on the Republican tax-overhaul plan. European equities rebounded following Friday’s slump, while the pound rallied.
The greenback erased most of Friday’s losses and the yield on benchmark U.S. debt climbed back toward 2.4 percent after the Senate’s passage of corporate tax-cut legislation early on Saturday drew focus away from the investigation into connections between President Donald Trump’s aides and Russia. The Stoxx Europe 600 Index headed for the first gain in three days as all sectors advanced. The pound reversed a decline after the European Union’s chief negotiator said that a breakthrough is likely on Monday in Brexit talks.
The positive stock moves will be welcomed by many investors after the evolving investigation into potential connections between Trump’s campaign and Russian meddling in the 2016 U.S. election rocked markets Friday. But with global equities still hovering near all-time highs, traders may be seizing on the potential of tax cuts boosting growth in the world’s largest economy as reason enough to sustain the bull market.
As the dollar gained, the euro slipped versus most major peers. Traditional safe-haven assets fell, with gold resuming its downward path after a jump on Friday and the yen slumping. West Texas oil fell below $58 a barrel.
The MSCI Asia Pacific Index was stable following a drop for Japan’s Topix and a jump for South Korea’s Kospi.
Terminal customers can read more in our Markets Live blog.
Here are some of the key events facing markets in the coming days:
- The European Commission College of Commissioners discusses Brexit on Wednesday and will likely make its recommendation on whether sufficient progress has been made to move negotiations onto the future relationship.
- The U.S. faces a partial government shutdown after money runs out on Dec. 8 if Congress can’t agree on a spending bill by then.
- U.S. employers probably hired at a robust pace in November as the unemployment rate held at an almost 17-year low. The Labor Department’s jobs report next Friday may also show a bump up in average hourly earnings.
- Countries setting monetary policy this week include Australia, Brazil, Canada, India and Poland.
These are the main moves in markets:
Stocks
- The S&P 500 rose 0.7 percent as of 9:31 a.m. in New York.
- The Stoxx Europe 600 Index climbed 1.3 percent, the most since July.
- Japan’s Nikkei 225 Stock Average dipped 0.5 percent.
- The MSCI Emerging Market Index gained 0.7 percent, the largest rise in almost two weeks.
- The U.K.’s FTSE 100 Index increased 0.5 percent.
Currencies
- The Bloomberg Dollar Spot Index rose 0.3 percent.
- The euro decreased 0.5 percent to $1.1842.
- The British pound increased 0.3 percent to $1.3513.
- The Japanese yen sank 0.7 percent to 113 per dollar, the largest decrease in six weeks.
Bonds
- The yield on 10-year Treasuries rose three basis points to 2.39 percent.
- Germany’s 10-year yield climbed three basis points to 0.34 percent.
- Britain’s 10-year yield increased six basis points to 1.29 percent.
Commodities
- West Texas Intermediate crude decreased 1.3 percent to $57.62 a barrel.
- Gold fell 0.3 percent to $1,279 an ounce.
— With assistance by Abhishek Vishnoi, Adam Haigh, Elena Popina, Sarah Ponczek, and Jeran Wittenstein
