U.S. stocks rebounded after nearing oversold territory this week, U.S. Treasury yields fell while Federal Reserve Chair Jerome Powell sidestepped investor concerns over the outlook for interest rates at an event. 

Tech behemoths, including Nvidia Corp. and Meta Platforms Inc., drove equity gauges higher, shaking off a choppy morning session. Stocks also got a boost from Ford Motor Co. and General Motors Co. after the United Auto Workers was said to dial back the wage increases the union was seeking for workers. The S&P 500 gained 0.6 per cent while the Nasdaq 100 advanced 0.8 per cent. Nike Inc. climbed 3.7 per cent in post-market trading after first quarter earnings beat analysts’ estimates.

September is still shaping up to be the worst month in 2023 for the U.S. stock benchmarks after the Fed left interest rates at the highest in 22 years at its last meeting.

Dovish-leaning comments from one policymaker and weak consumer spending data helped stoke hope for some easing of the Federal Reserve’s messaging ahead of Powell’s comments. Even, if the U.S. enters a recession it should be able to skirt a more severe downturn, according to Richmond Fed President Tom Barkin. 

It’s still too early to know if another rate increase will be needed, Barkin told Bloomberg Television. Earlier, the Chicago Fed’s Austan Goolsbee said policymakers were at risk of overshooting on interest rates by putting too much emphasis on the idea that steep job losses are needed to quell inflation.

Personal consumption, the main driver of the U.S. economy, rose an annualized 0.8 per cent in the April-to-June period, the weakest advance in over a year. Other data showed GDP rose at an unrevised 2.1 per cent rate during the period while weekly jobless claims came in lighter than estimates. Traders will next be looking to Friday data on the Fed’s preferred measure of inflation — the personal consumption expenditures price index.

“Many investors are revising their view around what the longer-run interest rate that is appropriate for the main western economies is,” Joseph Little, global chief strategist at HSBC Asset Management, said in an interview with Bloomberg Television.

 “All the while in the stock market you have this combination of equity investors raising up expectations for 2024 profits,” he added. “It is the consensus view: rising bond yields, you have an equity market trading on higher multiples. It is getting worse and worse. Many challenges at this point.”

A selloff in U.S. Treasuries had cooled ahead of Powell’s speech. In the U.K., benchmark government bond yields climbed as much as 20 basis points, the largest daily increase in almost a year on a closing basis. Global bonds are on track for the weakest month since February. 

The rally in oil paused Thursday after WTI crude traded above US$94 a barrel earlier in the week. The U.S. dollar and gold both slid.

Key events this week:

• Eurozone CPI, Friday
• Japan unemployment, industrial production, retail sales, Tokyo CPI, Friday
• U.S. consumer spending, wholesale inventories, University of Michigan consumer sentiment, Friday
• ECB President Christine Lagarde speaks, Friday
• New York Fed President John Williams speaks, Friday

Some of the main moves in markets:

Stocks

• The S&P 500 rose 0.6 per cent as of 4:01 p.m. New York time
• The Nasdaq 100 rose 0.8 per cent
• The Dow Jones Industrial Average rose 0.3 per cent
• The MSCI World index rose 0.5 per cent

Currencies

• The Bloomberg Dollar Spot Index fell 0.4 per cent
• The euro rose 0.6 per cent to $1.0564
• The British pound rose 0.5 per cent to $1.2199
• The Japanese yen rose 0.3 per cent to 149.24 per dollar

Cryptocurrencies

• Bitcoin rose 3.3 per cent to $27,115.65
• Ether rose 4.1 per cent to $1,658.93

Bonds

• The yield on 10-year Treasuries declined three basis points to 4.57 per cent
• Germany’s 10-year yield advanced nine basis points to 2.93 per cent
• Britain’s 10-year yield advanced 13 basis points to 4.48 per cent

Commodities

• West Texas Intermediate crude fell 2.1 per cent to $91.73 a barrel
• Gold futures fell 0.4 per cent to $1,883.80 an ounce

This story was produced with the assistance of Bloomberg Automation.

--With assistance from Alice Atkins and Boris Korby.