Markets in the U.S. were closed on Monday in honor of Martin Luther King Day. U.S. stocks closed with small gains on Friday: the S&P 500 gained 0.40% to 3,999.09, the Dow Jones rose 0. 33% to 34,189.97, and the Nasdaq gained 0.71% to 11,079.16.
Last week, the Dow Jones Industrial Average recorded a 2% increase in stock market buying and selling. The S&P 500 index was up 2.7%, the Nasdaq Composite was up 4.8%, and the small-cap Russell 2000 was up 5.3%.
U.S. crude oil futures rallied last week, rising 8.3% to $79.86 a barrel. The price of copper also increased by 7.65%, according to reports.
Despite Friday’s rally, the 10-year Treasury yield dropped six basis points to 3.51%. Investors expect the Federal Reserve to hike interest rates by a quarter point in February and March and then stay there. Lower Treasury yields and a more optimistic economic outlook worldwide are putting downward pressure on the dollar’s value, providing further upside to stock and commodity prices.
Despite hikes in interest rates and inflation from the U.S. Federal Reserve, the consumer remains financially stable, as demonstrated by Friday’s fourth-quarter results from Bank of America and JPMorgan. Despite this, both banks have warned of a potential recession. Financial experts expect the Federal Reserve to hike its rate by a quarter of a point on February 1, which is lower than the 50 and 75 basis points of the previous two meetings.
They also expect another quarter-point increase in March, taking the range from 4.75 to 5%. Financial experts have stated that Federal Reserve members are pushing for a slower pace of tightening. The probability of a quarter-point increase at the February 1 Federal Open Market Committee meeting is now 93.2%, much higher than the 76.7% reported that day.
Asian stocks exhibited a volatile performance on Monday with not strictly positive macroeconomic data. Japan’s Nikkei index fell 1.5% after a strong start, Hong Kong lost 0.33%, and Shanghai posted positive growth of 1.10%. The Bank of Japan has a rate meeting scheduled for Wednesday, and the yield on the Japanese 10-year bond has reached a new high. China is still dealing with a severe Covid-19 outbreak.
Chinese media have strongly criticized the BioNTech/Pfizer mRNA vaccine and its safety. To meet the needs of the mainland Chinese population eager to obtain Western vaccination, services have been made available in Hong Kong despite its high price of around $360 per dose.
U.S. stocks closed on Martin Luther King Day. They closed with small gains on Friday: The S&P 500 gained 0.40% to 3,999.09, the Dow Jones rose 0.33% to 34,189.97, and the Nasdaq made +0.71% to 11,079.16.
