Wall Street inched higher before the bell Friday after Federal Reserve Chair Jerome Powell said that the central bank would not hesitate to raise its benchmark borrowing rate again if inflation continues to linger.
Futures for the S&P 500 and the Dow Jones Industrial Average each rose about 0.2% early.
Bond yields came back down after jumping Thursday on a report that suggested the U.S. job market remains remarkably solid. They rose further when the U.S. government announced the results of a sale of $24 billion in Treasury bonds and pushed even higher after Powell said the Fed “will not hesitate” to raise interest rates further if it feels high inflation is not fully under control.
Stocks had been higher earlier Thursday with the S&P 500 expected to reach its longest winning streak in 19 years. But it quickly sagged as Treasury yields rose.
The 10-year Treasury yield settled back to 4.58% early Friday from 4.64% late Thursday. The yield on the 2-year Treasury inched down to 4.99% from 5.03% late Thursday.
High rates and yields have been the main driver for the stock market for months because they hurt prices for investments, slow the economy and raise the pressure on the financial system.
A swift rise in the 10-year yield that began in the summer earlier knocked the S&P 500 down by 10% from its peak for the year. The yield briefly topped 5% to reach its highest level since 2007, as it caught up with the Federal Reserve’s main interest rate, which is above 5.25% and at its highest level since 2001.
Early Friday the Las Vegas hotel workers union said it had reached a tentative deal with Wynn Resorts, the last contract needed to avoid a strike Friday. The new five-year contract covers employees at the company’s flagship hotel-casino and Encore Resorts and comes after the union’s tentative deals earlier in the week with Caesars Entertainment and MGM Resorts.
Wynn Shares tumbled 5.5% in premarket trading Friday, with some industry analysts pointing to a slow rebound for its resort properties in Macau.
Shares of Green Dot slid nearly 8% before markets opened after the financial technology and payments platform company missed Wall Street profit targets.
In Europe at midday Germany’s DAX lost 0.6%, the CAC 40 in Paris fell 1% and Britain’s FTSE 100 tumbled 1.3% lower.
European Bank President Christine Lagarde and the head of Germany’s Bundesbank were due to speak later Friday in updates on the likely direction of EU monetary policy after the ECB kept its key interest rate unchanged late last month after 10 straight increases following a broad decline in inflation to 4.3%.
In Asian trading, the Hang Seng in Hong Kong dropped 1.8% to 17,203.26 and the Shanghai Composite index slipped 0.5% to 3,038.97.
A financial services business of China’s biggest bank, ICBC, said it was hit this week by a ransomware attack that reportedly disrupted trading in the U.S. Treasury market.
New York-based Industrial and Commercial Bank of China Financial Services handles trades and other services for financial institutions. It said it had isolated affected systems and that trades had cleared by Thursday. It was unclear how much of an impact the attack had on Treasury market trading.
Australia’s S&P/ASX 200 fell 0.6% to 6,976.50. Tokyo’s Nikkei 225 index dropped 0.2% to 32,568.11. Taiwan’s Taiex lost 0.4%, and the SET in Bangkok dropped 0.5%.
In energy trading, crude oil prices regained some the big losses from earlier in the week.
A barrel of benchmark U.S. crude added 80 cents to $76.54 in electronic trading on the New York Mercantile Exchange. It rose 41 cents to settle at $75.74 a barrel on Thursday. Brent crude, the international standard, gained 93 cents to $80.94 a barrel.
The U.S. dollar rose to 151.41 Japanese yen from 151.34 yen. The euro edged higher to $1.0684 from $1.0666.
On Thursday, one of Wall Street’s longest winning streaks in two decades came to an end as the S&P 500 sank 0.8%. The Dow industrials dropped 0.6% and the Nasdaq composite lost 0.9%.
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