US stocks close higher as risk-off sentiment fades
S&P 500, NASDAQ AND DOW ALL FINISHED THE WEEK IN POSITIVE TERRITORY
The US dollar rose and Treasury yields slipped on Friday on anxiety about a potential global trade war as the leaders of the Group of Seven countries met in Canada.
US stocks ended higher though thanks mostly to gains in health care and consumer staples stocks.
G7 leaders met in Quebec Friday with the US’s trading partners furious over President Donald Trump’s decision last week to impose tariffs on steel and aluminium imports from allies like Canada, the European Union, and Mexico. With retaliation already being proposed, the risk to business confidence is a worry for investors.
“There are so many questions out there,” said Thomas Roth, head of Treasury trading at MUFG Securities America in New York.
“There’s nervousness about the G7 summit and Trump’s North Korea meeting.” An unprecedented US-North Korea summit is also scheduled for June 12 in Singapore, with Washington seeking to pressure Pyongyang into abandoning its nuclear weapons programme.
Rate expectations
Expectations for another interest rate rise in the United States at next Wednesday’s Federal Reserve policy meeting, and the prospect that the European Central Bank will soon signal a winding-down of its massive monetary stimulus could add to market volatility this week, investors said.
In late trading, the US dollar rose 0.2 per cent against a basket of currencies to 93.56, but fell 0.7 per cent for the week, its steepest weekly fall in 10 weeks. Against the yen, however, the dollar was last down 0.2 per cent at 109.45.
The yield on benchmark 10year Treasury notes was 2.926 per cent, down 0.3 basis point from late Thursday.
Stock investors appeared to put aside their worries about US relations with its biggest trading partners for now.
The Dow Jones Industrial Average rose 75.12 points, or 0.3 per cent, to 25,316.53, the S&P 500 gained 8.66 points, or 0.31 per cent, to 2,779.03 and the Nasdaq Composite added 10.44 points, or 0.14 per cent, to 7,645.51.
The pan-European FTSEurofirst 300 index lost 0.24 per cent, while MSCI’s gauge of stocks across the globe shed 0.14 per cent.
Oil prices fell, pressured by concerns about surging US output and falling demand in China.
US crude fell 21 cents to settle at $65.74 a barrel, while Brent declined 86 cents to settle at $76.46.