Equities showed a surge following the release of the minutes of the FOMC meeting as investors focused more on inflation concerns than the recession while oil remained in the fall.
The major U.S. indices ended in a rally, signaling that the inflation outlook is declining and subtly revealing a loss of confidence in the Federal Reserve’s (Fed) ability to contain it.
The average Dow Jones Industrial index rose 0.22%, the S&P 500 index hit 0.36% and the Nasdaq Composite index added 0.35% while the MSCI index which tracks a number of other stocks jumped 0.14%.
Commenting by Thomas Kennedy of JP Morgan Global Wealth Management, investors are now stuck between worries about inflation or declining growth prospects.
However, correlations across assets over the past few weeks suggest inflation is a bigger concern in the market right now.
Meanwhile, data also showed U.S. job openings fell from expectations in May which signaled the labor market remained tight and eased perceptions of an ongoing recession.
In addition, a survey by the Institute of Supply Management (ISM) added that the Fed may need to continue raising rates to cool the economy and control prices.
Turning to currency movements, the dollar index strengthened above the 107 level while the Euro fell $ 1.02 for the first time since December 2002.
Meanwhile, the US Treasury yield benchmark slipped to a 5 -week low while the main part of the yield curve remained upside down signaling a recession warning.
The benchmark 10 -year yield fell 2.913%, moving away from the 3.498% level recorded on June 14, the highest level since April 2011.
As for commodities, oil prices remained in decline with Brent crude down 2.3% at $ 100.40 a barrel.
