Tech Leads Stock Losses While Treasuries Advance: Markets Wrap

(Bloomberg) -- Stocks almost wiped out their gains as technology shares turned lower, offsetting optimism over solid corporate earnings and economic reports. Treasuries climbed.

The S&P 500 notched an advance of less than 0.1% while the Nasdaq 100 ended in the red. The Dow Jones Industrial Average rose to a fresh record. Moderna and Johnson & Johnson retreated, while Pfizer finished little changed on news the U.S. will support a proposal to waive intellectual-property protections for Covid-19 shots. Peloton tumbled after recalling its treadmill products. Copper and lumber rallied, adding to inflation worries.

As the world’s largest economy rebounds, an intense debate has emerged over whether actual price pressures are set to materialize. The five-year breakeven rate -- a proxy for the annual inflation rate bond traders expect over the span -- jumped to the highest since 2008. Despite the increase in commodity prices and supply shortages, several Fed officials said Wednesday that inflation is unlikely to get out of control.

Money managers who’ve spent the bulk of their careers profiting from deflationary trends need to quickly switch gears or risk an “inflation shock” to their portfolios, warned JPMorgan Chase & Co. chief global markets strategist Marko Kolanovic.

“Given the still high unemployment, and a decade of inflation undershoot, central banks will likely tolerate higher inflation and see it as temporary,” he wrote. “The question that matters the most is if asset managers will make a significant change in allocations to express an increased probability of a more persistent inflation.”

Here are some key events to watch this week:

• Bank of England rate decision Thursday
• The April U.S. employment report is released on Friday

These are some of the main moves in markets:

Stocks

• The S&P 500 was little changed as of 4 p.m. New York time
• The Nasdaq 100 fell 0.3%
• The Dow Jones Industrial Average rose 0.3%
• The MSCI World index rose 0.3%

Currencies

• The Bloomberg Dollar Spot Index was little changed
• The euro was little changed at $1.2003
• The British pound rose 0.1% to $1.3907
• The Japanese yen rose 0.1% to 109.20 per dollar

Bonds

• The yield on 10-year Treasuries declined two basis points to 1.57%
• Germany’s 10-year yield advanced one basis point to -0.23%
• Britain’s 10-year yield advanced two basis points to 0.82%

Commodities

• West Texas Intermediate crude fell 0.6% to $65 a barrel
• Gold futures rose 0.6% to $1,787 an ounce

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