US stock indexes are drifting following a mixed set of earnings reports from Morgan Stanley, UnitedHealth Group and other big companies.
The S&P 500 rose 0.1 per cent afternoon trading after flipping earlier between small gains and losses. The Dow Jones was up 28 points, or 0.1 per cent, and the Nasdaq composite was 0.2 per cent lower. The Australian sharemarket is set to edge higher, with futures pointing to a rise f 14 points, or 0.2 per cent, at the open. The ASX surged by 1.4 per cent on Thursday.
Wall Street is treading water a day after surging higher. Credit: AP
Stocks were holding steadier after shooting higher the day before on hopes that an encouraging report on inflation may convince the Federal Reserve to deliver more cuts to interest rates this year. Treasury yields were also more placid in the bond market following some mixed economic reports on Thursday.
One report showed growth for sales at US retailers wasn’t as strong last month as economists expected. Another said more US workers filed for unemployment benefits last week, and a third said manufacturing in the mid-Atlantic area unexpectedly roared back to growth.
Taken together, the trio of reports suggest the US economy is nowhere near a recession but may be showing some signs of slowing that could keep pressure off inflation. Markets have been lurching down and up in recent weeks, as economic reports force traders to revamp their expectations about what the Federal Reserve may do with interest rates in 2025.
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When reports have calmed worries about inflation, expectations have climbed for possible cuts to rates. That has typically sent Treasury yields lower and stock prices higher. When inflation looks to be a bigger problem, whether through a still-solid economy or possible policies coming from President-elect Donald Trump, Treasury yields have climbed, and stock prices have tended to sink.
On Thursday, yields were holding relatively steady. The yield on the 10-year Treasury eased to 4.61 per cent from 4.66 per cent late Wednesday. It drifted up and down during the morning but remained well below its 4.79 per cent level from Tuesday.
The two-year Treasury yield, which more closely follows expectations for the Fed’s upcoming moves, slipped to 4.23 per cent from 4.27 per cent late Wednesday. It was at 4.37 per cent just two days ago.
