The MSCI global equities index experienced a rebound in the afternoon as investors repositioned for month-end. After initially trading in the red, the MSCI All Country World Price Index turned positive ahead of a rebalance. The global index closed up 0.57% at 785.54, signaling a positive sign for those who are bullish in the market.
Inflation Data and Market Reaction
Data from the U.S. Commerce Department showed a modest rise in inflation in April, with the personal consumption expenditures (PCE) price index increasing 0.3%. Core PCE rose 0.2% compared to 0.3% in the previous month. While some relief was expressed that inflation wasn’t higher than expected, market strategists noted that the data did not significantly change interest-rate expectations.
Separately, the Chicago Purchasing Managers Index (PMI) for manufacturing in the Chicago region fell to 35.4, below economist expectations of 41. Despite this, the MSCI index showed a monthly gain, marking its second consecutive monthly increase.
In the U.S., the Dow Jones Industrial Average rose 1.51%, the S&P 500 gained 0.80%, and the Nasdaq Composite saw a slight decline of 0.01%. In Europe, the STOXX 600 index closed up 0.3% despite a second consecutive weekly decline. Euro zone inflation rose more than expected in May, but analysts suggested it would not deter the European Central Bank from lowering borrowing costs next month.
Currency and Bond Market Movement
The dollar index fell 0.15% to 104.61, marking its first monthly decline in 2024. The euro gained against the dollar but weakened against the Japanese yen. Treasury yields fell after signs of inflation stabilization in April, with the 10-year note yield dropping to 4.503% and the 30-year bond yield falling to 4.6511%.
Oil prices declined as traders awaited the outcome of the OPEC+ meeting scheduled for Sunday. U.S. crude settled at $76.99 per barrel, while Brent settled at $81.62. Gold prices fell to $2,326.97 an ounce for the day but were on track for a fourth consecutive monthly gain.
Overall, the market exhibited mixed reactions to the inflation data and other economic indicators. Investors are closely monitoring central bank actions and global economic trends to gauge the future direction of equities, currencies, and commodities.