The global equities index, MSCI, saw a notable rebound in afternoon trading as investors repositioned themselves for month-end activities. Initially in the red, the MSCI All Country World Price Index turned positive towards the end of the session before Wall Street trading closed. The index was up 0.57% at 785.54, showcasing a strong recovery from earlier lows. Joe Saluzzi, head of Equity Market Structure Research at Themis Trading, mentioned that the upside reversal at the end of the day was a positive sign for bullish investors, attributing it to month-end portfolio adjustments.
The U.S. Commerce Department released data showing a modest rise in inflation in April, with the personal consumption expenditures (PCE) price index increasing by 0.3%. These figures were in line with expectations, and core PCE rose by 0.2%. While some strategists found relief in the fact that inflation wasn't higher than anticipated, others like Robert Pavlik from Dakota Wealth stated that the data did not significantly alter interest-rate expectations. The release of the Chicago Purchasing Managers Index (PMI), which monitors manufacturing health in the region, indicated a decline to 35.4 from the previous month's 37.9, falling below economist forecasts of 41. This data contributed to the fluctuations in the global equities index.
Wall Street Performance and European Markets
On Wall Street, the Dow Jones Industrial Average and the S&P 500 saw gains, while the Nasdaq Composite experienced a slight loss. Meanwhile, Europe's STOXX 600 index closed with a 0.3% increase, achieving a 2.6% monthly gain but marking a 0.5% decline for the week. Euro zone inflation exceeded expectations in May which may lead to adjustments in borrowing costs by the European Central Bank. These developments could influence market movements in the upcoming weeks.
Currency and Treasury Yield Movements
The dollar index, which measures the greenback against a basket of currencies, recorded a decline after the inflation data release. The euro strengthened against the dollar, while the dollar gained against the Japanese yen. Treasury yields moved lower following signs of inflation stabilization in April, suggesting that expectations for potential rate cuts by the Federal Reserve later in the year remained plausible.
Oil prices experienced a decline as traders awaited the outcome of the upcoming OPEC+ meeting, which would determine the fate of the producer group's output cuts. U.S. crude settled lower at $76.99 a barrel, while Brent settled at $81.62. Gold prices fell on the day but were on track for a fourth consecutive monthly gain, indicating ongoing market volatility and uncertainty.