Wall Street rallies again on falling Treasury yields

Stocks traded higher on the New York Stock Exchange as a result of a drop in the yield of US Treasury Bonds and after the new appearance of the Federal Reserve (FED) chairman, Jerome Powell, on Capitol Hill, where he anticipated that there will be a new adjustment of 75 basis points in the agency’s reference rate at the end of July.

The Dow Jones Industrial Average gained 0.6%, the S&P 500 extended index rose 1% and the Nasdaq technology indicator climbed 1.6%, according to data provided by the New York Stock Exchange (NYSE).

The yield on the 10-year Treasury note, which helps set mortgage rates, fell today to 3.09% versus 3.15% at Wednesday’s close.

This reversed the downward trend in the stock market and as of midday there was a clear buying appetite.

Commodities, from oil to copper to wheat, remained under pressure as signs of slowing demand increased.

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Jobless claims remained near a five-week high, while U.S. manufacturing and services activity cooled in June.

Fed Chairman Jerome Powell called his commitment to curbing inflation “unconditional” and another of his colleagues backed raising interest rates by 75 basis points at the end of July.

“We have a labor market that is unsustainably hot and we are way off our inflation target,” Powell told the House Financial Services Committee during his second day of semiannual congressional testimony.

“We really need to restore price stability, get inflation back down to 2%, because without that we can’t have a sustained period of maximum employment,” he added.

“People expect inflation to come back down to levels consistent with our price stability mandate. But we haven’t had a test like this. We haven’t had a prolonged period of high inflation for a long time. So it’s not a comfortable place to be.”

Top performers on the Dow Jones were Salesforce +3.3%, Merck +3.2%, Nike 2.9% and Procter & Gamble +2.7%.

In the S&P 500, highlights included Autodesk +8.4%, Factset Research +8%, Ceridian +7.2% and Whirlpool +7%.

The most important Nasdaq increases were noted in DataDog +10.4%, Zscaler +9.2%, Okta +8.6% and Lucid Group +7%.

In Europe, stocks closed lower as growing fears of an impending recession weighed on investor confidence.

French and German purchasing managers’ index data for June came in weaker than expected, adding to recession fears.

In the leading Euro Stoxx 50 index, which declined 0.8%, Spanish Iberdrola +3.8%, French LVMH +2.6%, Dutch Prosus +2.2% and French L’Oreal and Hermes +2% rose.

In London, the FTSE fell 1%, the Frankfurt DAX declined 1.8%, the Paris CAC 40 contracted 0.6%.

In the Mediterranean, the IBEX 35 fell 0.5% while the Milan MIB declined 0.8%.