THE GIST (“THE WHAT”)
Building on Friday’s gains, the S&P 500 index closed today’s choppy session with a modest gain of 27.60 points at 4433.31, up 0.63% over the previous session. As yields edged lower following Fed Chair Jerome Powell’s cautious but hawkish comments, all sectors except Utilities traded higher. Technology and communication services sectors added most of the gains.
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THE DETAILS (The “How & Why”):
Treasury yields inched lower as investors digested Friday’s highly anticipated speech by Jerome Powell. While acknowledging that the price pressures have eased, he sounded caution that inflation still remains too high above the target 2% annual rate and that the policy makers are prepared to further hike rates if necessary.
Markets chose to focus on the dovish comments and mostly shrugged aside the caution. The 10-year Treasury yield eased 2.9 basis points to settle at 4.206%. Interest-sensitive technology stocks added to the most gains. Alphabet and Apple rose by 0.88% each. Nvidia also gained 1.78%.
Investors will now turn their attention to key data set to be released this week to gauge the Fed’s next policy move in September. July personal-consumption expenditure price index is due Thursday, followed by August’s nonfarm payrolls date on Friday.
Amongst the top performers of today’s session, Boston Scientific Corp led the gainers in the S&P 500 index, soaring 6% following reports that its Farapulse system to treat patients with atrial fibrillation have met its primary efficacy and safety endpoints.
3M Co was another strong gainer, jumping 5.2% following reports that the company has tentatively agreed to pay $5.5 billion to settle more than 300,000 lawsuits claiming it sold the U.S. military defective combat earplugs. Several analysts had estimated that the company could face the potential liability from this earplug litigation to be as high as $10 billion.