Economist's Insights

Today’s Trading Activity – Stocks Set Records Despite Fedspeak Forcing Yields Higher

Jun 19, 2017

The Dow and S&P both reached new records Monday as tech shares rallied to finish in front. The Dow gained 145 points, or 0.7%, as the S&P added 20 points, or 0.8%. The Nasdaq outperformed with a gain of 1.4% but finished 83 points shy of its previous high close. Although tech companies were the top performers, the S&P’s strength was broad based. Only three sectors moved lower; the rate-sensitive telecom and utilities sectors lost value but energy companies closed in last place. Energy’s losses were driven by a more than 1% drop in crude prices which reached their lowest levels since November 14. Equities gained in the face of hawkish commentary from NY Fed President Dudley (more below) that spurred yields to their highs of the day. The 2-year yield rose 4.1 bps to 1.36%, just a couple of basis points shy of its highest level since 2008. The 5-year yield rose 4.5 bps to 1.79% while the 10-year yield increased 3.7 bps to 2.19%. The Dollar also improved following Dudley’s remarks, returning to near its highest level in more than a month.