Tech stocks lead advance as dollar extends decline

U.S. stocks rose to record highs, Treasuries tumbled and the dollar weakened against all of its G-10 peers in the first official day of trading in 2018.

Technology shares led the rally and analyst upgrades fueled gains in consumerdiscretionary companies. The NASDAQ 100 Index climbed 1.8 percent, the biggest gain since Oct. 27. The NASDAQ Composite closed above 7,000 for the first time, while the Standard & Poor’s 500 Index also finished at an all-time high. European stocks started the year in the red, failing to capitalize on a positive Asian session as the strength of the region’s common currency weighed on exporters.

European bonds dropped and the euro strengthened to near a three-year high against the dollar as the region’s manufacturing activity expanded in line with estimates in December. The Bloomberg Dollar Index hit a three-month low, helping propel gold to the highest since September. West Texas oil fluctuated as Iran said protests in the country will fade in days. Bitcoin recovered from Monday’s losses.

“The backdrop for the dollar is just not very good,” said Mark McCormick, head of FX strategy for North America for Toronto Dominion Bank. “The global reflation trade is progressing along and the backdrop is that we’re rotating into a regime shift and that comes with a changing backdrop for capital flows.”

The Stoxx Europe 600 Index dropped, with consumer staples leading the decline as a majority of industry sectors ended lower. In Asia, the MSCI Asia Pacific Index climbed to a record, though markets in Tokyo remain closed until Thursday for Japanese holidays. Chinese equities led gains as property shares soared and a gauge of the nation’s manufacturing strength beat expectations.

Investors begin 2018 on the heels of a winning year for equities and a losing one for the greenback. Global stocks last year posted their best performance since 2009, fueled by a synchronous expansion and a goslow approach toward monetary-stimulus withdrawal in major economies.