U.S. Stocks Rise on Tech Bounce, Commodities Gain: Markets Wrap

(Bloomberg) -- Technology shares drove gains in U.S. equities, while natural gas and crude lifted commodities. The dollar strengthened with Treasuries as investors prepare to parse second-quarter earnings for more evidence global economic growth is back on track.

The S&P 500 Index rose for a second day as tech shares rebounded from last week’s selloff. Trading was light, with the volume 15 percent below the 30-day average at this time of day. European equities advanced following a similar climb across much of Asia. The dollar edged higher against most major currencies and bonds recovered after a drop last week. Natural gas futures jumped and crude rose above $44.50 a barrel.

With global stocks close to all-time highs, investors are shrugging off political uncertainty and placing their faith in a continued earnings expansion on broadening global growth. Germany’s trade surplus was higher than estimated as May exports beat forecasts, while U.S. employers added the most jobs in four months in June. PepsiCo Inc., JPMorgan Chase & Co., Citigroup Inc. and Wells Fargo & Co. are set to report results this week.

“Solid employment growth without inflation is the ‘not too hot, not too warm’ mix that keeps the Fed normalizing policy ever so slowly, equity indices marching ever higher and the economic cycle able to trundle on with no recession in sight,” Kit Juckes, a strategist at Societe Generale SA, wrote in a note to clients.

The G-20 summit made little headway on dominant foreign policy issues such as North Korea’s escalation of tensions. Meetings between U.S. President Donald Trump and the leaders of South Korea, Japan and China ended without a clear consensus about how to curb North Korea’s nuclear ambitions.

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Here’s what investors will be watching:

• Federal Reserve Chair Janet Yellen’s testimony before Congress will be in focus later this week as investors look for guidance on when the U.S. central bank could start reducing its balance sheet.
• The U.K. government is due to publish it’s Repeal Bill on membership of the European Union this week.
• European Central Bank President Mario Draghi, Executive Board member Benoit Coeure and Single Supervisory Mechanism Chair Daniele Nouy will participate in a Eurogroup meeting in Brussels.

These are the main moves in markets:

Stocks

• The S&P 500 rose 0.1 percent to 2,427.54 at 4 p.m. in New York, while the Nasdaq 100 Index added 0.7 percent.
• Materials producers in the S&P 500 rose 0.6 percent as metals advanced.
• Small caps in the Russell 2000 Index dropped 0.5 percent.
• The Stoxx Europe 600 Index advanced 0.4 percent. 
• The MSCI Emerging Market Index added 0.7 percent.

Currencies

• The Bloomberg Dollar Spot Index was flat. 
• The pound retreated 0.1 percent to $1.2880 and the euro dropped by a similar amount to $1.1385.

Bonds

• The yield on 10-year Treasuries dropped one basis point to 2.37 percent after rising 23 basis points in the past two weeks.  
• In Europe, peripheral nations led a rally with benchmark bonds yields in Italy and Spain shedding six basis points. The yield on 10-year bunds fell three basis points to 0.54 percent.

Commodities

• WTI crude added 0.4 percent to settle at $44.40 a barrel following its 2.8 percent slide Friday. 
• Gold futures climbed 0.3 percent to $1,213.90 an ounce after touching its lowest level since March. Silver futures jumped 1.4 percent.

--With assistance from Blaise Robinson Simon Ballard and Stephen Kirkland

To contact the reporter on this story: Natasha Doff in Moscow at ndoff@bloomberg.net.

To contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Cecile Gutscher