US stocks posted gains for the third day in a row, while US Treasury yields increased above 1.5% for the first time in a week.
Wall Street edged higher on Wednesday as investors reacted to Omicron-related news, adding to Tuesday’s gains.
The S&P 500 moved up 14 points to close 0.3% higher as the benchmark index eyed a new record close. The same outlook is reflected in deals on the Dow Jones Industrial Average, which climbed 35 basis points or 0.1%, and the Nasdaq Composite, which added 100 basis points, or 0.64%.
This was after European markets closed lower. The pan-European Stoxx 600 index fell 0.5%, the UK’s FTSE 100 and Germany’s DAX closed 0.04% and 0.8% respectively while France’s CAC 40 dipped 0.7%. The markets are set to open in the red on Thursday, although some volatility could see a broader reversal.
US stocks are eyeing a fourth day of upside action, a winning streak that could see sentiment significantly change as the market heads towards the second half of December, historically known for the so-called Santa Claus rally.
However, sentiment is largely mixed as investors ingest news on the Omicron variant and reports that two more vaccine shots could be enough.
Yields edge higher
In the yield market, fresh gains pushed the benchmark US 10-year Treasury yields above1.5%. It means the debt instrument has posted three straight days of gains.
Interest on the 10-year US T-notes surged by 4.8 basis points and broke above the threshold for the first time in a week. Gains stood at 1.528% at the close.
The gains come after last week’s market sell-off ended with the 10-year T-note seeing its biggest weekly dip in almost 18 months.
Wisdom Tree strategist Kevin Flagan told Reuters on Thursday that Treasury yields are likely to rise further if new developments help temper concerns about Omicron.
On investor watch this week, we have the US consumer price inflation (CPI) data for November, which is out on Friday. With October data showing the fastest inflation spike in over 30 years at 6.2%, forecasts of higher figures might see a faster tapering from the Fed