U.S. Stocks Climb, Dollar Falls on Fed-Cut Wagers: Markets Wrap

(Bloomberg) -- U.S. stocks rebounded and the dollar fell after Federal Reserve Bank of New York President John Williams highlighted the need for swift action should policy makers conclude the economy is in trouble.

Consumer and financial stocks led gains in the S&P 500 Index, while Treasury 10-year yields dropped. A positive outlook from Apple Inc. supplier’s Taiwan Semiconductor Manufacturing Co.’s lifted chipmakers. The NYSE FANG+ Index slid on Netflix Inc.’s surprise loss of U.S. customers. A report that Iran made a “substantial” offer on its nuclear program in return for fewer sanctions gave a lift to equities that was later tempered by news that the U.S. shot down an Iranian drone. In after-hours trading, Microsoft Corp. and cybersecurity company CrowdStrike Holdings Inc. rallied after sales topped estimates.

The futures market edged closer to the idea of a half-point U.S. rate cut this month, with fed funds now pricing in about 42 basis points of easing. Fed Vice Chairman Richard Clarida told Fox Business Network that policy makers shouldn’t wait for the economy to turn down to act. Cutting rates could help cushion some of the blow from uncertainty about trade that’s likely to prove persistent, according to Fed Bank of St. Louis President James Bullard.

“We’re in a trade war, you’re seeing the impact on corporate earnings, you’re seeing the central banks forced to scramble to react to that,” Bob Michele, CIO and head of global fixed income at JPMorgan Asset Management, said in a Bloomberg TV interview.

Elsewhere, oil slid to the lowest in almost a month as pessimism about a trade truce between the U.S. and China continued to dog markets, while the resumption of Russian pipeline flows fed worries about a supply glut. The pound climbed as the British Parliament backed measures to prevent the next prime minister suspending the legislature to pursue a no-deal Brexit.

These are the main moves in markets:

Stocks

• The S&P 500 rose 0.4% to 2,995.11 as of 4 p.m. New York time.
• The Stoxx Europe 600 Index decreased 0.2%.
• The MSCI Asia Pacific Index fell 0.6%.

Currencies

• The Bloomberg Dollar Spot Index dipped 0.5%.
• The euro gained 0.5% to $1.1276.
• The British pound climbed 1% to $1.2554.
• The Japanese yen added 0.6% to 107.26 per dollar.

Bonds

• The yield on 10-year Treasuries dipped two basis points to 2.03%.
• Germany’s 10-year yield declined two basis points to -0.31%.
• Britain’s 10-year yield was unchanged at 0.759%.

Commodities

• The Bloomberg Commodity Index dipped 0.8%.
• West Texas Intermediate crude declined 2.6% to $55.30 a barrel.

--With assistance from Nancy Moran, Sophie Caronello, Todd White, Yakob Peterseil, Cecile Gutscher, Tom Keene, Nejra Cehic, Adam Haigh and Vildana Hajric.

To contact the reporter on this story: Rita Nazareth in New York at rnazareth@bloomberg.net

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

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