By Stephen Culp
NEW YORK (Reuters) – Mega-cap tech stocks pushed the Nasdaq and Nasdaq to higher closes on Monday as U.S. Treasury yields took a pause and investors braced for a busy week from central banks.
rose and reached a new high after US President-elect Donald Trump suggested he planned to set up a strategic bitcoin reserve.
The FANG group of technology stocks and technology-related momentum stocks performed strongly, gaining 2.7% on the day.
“We continue to see uneven upside in stocks. The rotation to value appears to have died down, at least for now,” said Oliver Pursche, senior vice president at Wealthspire Advisors, in New York.
“There is a risk mentality at the moment that translates into equities more broadly, and it continues to fuel the view that under a Trump administration the investment climate will be favorable to investments in technology and new world types. Pursche added.
The Federal Open Market Committee (FOMC) will meet on Tuesday for its final monetary policy meeting of 2024, which is expected to end with a 25 basis point cut in the key Fed funds rate.
Investors will scrutinize the Fed’s Summary of Economic Projections (SEC) and its ‘dot plot’, which charts the central bank’s future rate-cutting path, which has become less certain in light of recent data pointing to a persistent inflation in a relatively robust economy.
“I will be listening for forward-looking statements addressing whether the Fed believes they are in a restrictive mode after this next cut and when they plan to move to neutral, what conditions are needed to move to neutral to go. Pursche said.
A report from S&P Global shows that US business activity accelerated its expansion this month, despite continued weakness in the manufacturing sector.
In addition to central bank actions elsewhere, Sweden’s Riksbank is also expected to cut rates, while policymakers in Japan, Britain and Norway remain steady.
Soft retail sales data from China underlined the need for more aggressive stimulus from Beijing.
The index fell 110.21 points, or 0.25%, to 43,717.85, the S&P 500 rose 23.03 points, or 0.38%, to 6,074.12 and rose 247.17 points, or 1 .24%, to 20,173.89.
European shares closed lower, pressured by heavyweight luxury and energy stocks in the wake of dismal Chinese retail sales.
French stocks weighed on European markets after Moody’s (NYSE:) unexpectedly downgraded the country on Friday.
The MSCI index for shares around the world rose 1.62 points, or 0.19%, to 867.76.
The index fell by 0.12%, while the broad European index fell by 1.38 points, or 0.07 points.
Emerging market stocks fell 4.42 points, or 0.40%, to 1,102.59. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.38% lower at 583.19, down 12.95 points, or 0.03%, to 39,457.49.
10-year U.S. Treasury yields held steady near a three-week high as investors awaited the Fed’s interest rate decision on Thursday.
The yield on U.S. 10-year benchmark bonds fell 0.4 basis points to 4.395%, down from 4.399% late on Friday.
The yield on thirty-year bonds fell 1.2 basis points to 4.6023%, from 4.614% late on Friday.
Yields, which typically keep pace with interest rate expectations for the Federal Reserve, rose 0.2 basis points to 4.243%, up from 4.241% late Friday.
The dollar hovered around a three-week high as investors expected the Fed could signal a more moderate pace of easing in the coming year.
The , which measures the dollar against a basket of currencies including the yen and euro, fell 0.01% to 106.86, while the euro rose 0.07% to $1.0509.
Against the Japanese yen, the dollar rose 0.31% to 154.13.
Bitcoin, which has risen more than 50% since the US presidential election, hit a new high above $106,000 after Trump signaled the possible creation of a bitcoin reserve fund.
Bitcoin rose 3.10% to $106,015, while it rose 4.94% to $4,046.40.
Crude oil prices fell as soft data from China fueled fears of weakening demand from the world’s biggest oil importer.
fell 0.81% to settle at $70.71 per barrel while falling to $73.81 per barrel, down 0.78% on the day.
Gold prices gradually rose as the dollar eased ahead of the central bank’s decision.
rose 0.17% to $2,652.29 an ounce. The US fell 0.15% to $2,652.00 an ounce.
