U.S. stocks are trading higher today, lifted by positive economic reports and dovish comments from Federal Reserve officials. The S&P 500 Index is up 0.43%, the Dow Jones Industrial Average is up 0.20%, and the Nasdaq 100 is up 0.60% as of midday. Investors are responding positively to stronger-than-expected U.S. economic data.
The June S&P U.S. manufacturing PMI stayed at 52.0, beating expectations of a drop to 51.0. May existing home sales also rose unexpectedly by 0.8% to 4.03 million, against forecasts of a 1.3% decline. Federal Reserve Governor Michelle Bowman expressed support for a possible interest rate cut at the upcoming FOMC meeting. She said that if inflation stays under control, lowering the federal funds rate could help maintain a strong labor market.
Despite the positive sentiment, investors remain cautious due to increased geopolitical tensions. The recent U.S. bombing of Iran’s nuclear facilities has raised worries about potential disruptions in oil supply from the Middle East. WTI crude oil prices initially jumped by over 6% but have since reversed those gains and are now trading lower.
Iran has vowed to respond to the U.S. strikes but has not yet taken major action like closing the strategic Strait of Hormuz, a key channel for global oil and LNG shipments. This week, investors will watch for any further retaliation from Iran and potential effects on global trade. They will also monitor key economic indicators:
– Tuesday: The Conference Board’s U.S. Consumer Confidence Index is expected to rise to 99.8.
– Wednesday: Fed Chair Jerome Powell will testify before the Senate Banking Committee on monetary policy.
– Thursday: Q1 GDP figures are due, with expectations remaining at a contraction of 0.2%.
Economic data lifts U.S. stocks
– Friday: Personal spending and income data for May and the University of Michigan’s U.S. consumer sentiment index will be released.
Overseas markets were mixed. The Euro Stoxx 50 fell 0.16%, while China’s Shanghai Composite rose 0.65% and Japan’s Nikkei Stock Average closed down 0.13%. The 10-year U.S. Treasury note yield has fallen to a one-week low of 4.33% in response to rising geopolitical tensions and dovish Fed comments.
European bond yields also declined. Defense contractors saw gains amid increased conflict risks, including Huntington Ingalls Industries, Northrop Grumman, General Dynamics, and L3Harris Technologies. Tesla surged over 9% after launching its driverless taxi service in Austin, Texas.
Northern Trust rose more than 8% on news of potential merger interest from Bank of New York Mellon. FactSet Research Systems climbed over 5% after raising its full-year revenue forecast. However, cruise line operators and energy stocks were under pressure due to fluctuating crude prices.
Norwegian Cruise Line Holdings dropped more than 5%, while APA Corp and other energy firms fell significantly as WTI crude prices edged lower. Earnings reports are scheduled today from Commercial Metals Co, FactSet Research Systems Inc, and KB Home. The stock market’s performance today reflects a mix of strong U.S. economic data, dovish Federal Reserve signals, and geopolitical uncertainties.
Investors will continue to weigh these factors as new data and developments emerge throughout the week.