Economist's Insights

Today’s Trading Activity – The Dollar Rallied with Stocks, Treasury Yields Inched Higher, Gasoline Prices Extended their Climb

Aug 30, 2017

U.S. stocks overcame some early negativity and all three major indices moved higher Wednesday. The Nasdaq led the gains with a 1.05% rally and the S&P’s tech sector led the broader index to a 0.46% gain. The Dow climbed a more modest 0.12%. Pre-market futures trading had shown a rather subdued response to ADP’s stronger-than-expected private payroll data and the bigger-than-expected upward revision to 2Q GDP. However, momentum in actual trading strengthened within the first 30 minutes and the major indices peaked with just over an hour to go before the closing bell. U.S. Treasury yields did move higher immediately after the solid morning data but fell back to close near their daily lows. Between the 2-year and 7-year parts of the curve, yields rose roughly 1 bp. The 10-year yield rose less, up just 0.2 bps to 2.13%. The Dollar climbed for almost the entire session and ended near its daily high. The greenback’s boost began overnight as the Euro reversed sharply lower after touching $1.20 on Tuesday for the first time since January 2015. The solid U.S. economic data drove the next leg higher for the currency. Keeping an eye on energy commodities, the effect of Harvey’s destruction showed no signs of letting up. Gasoline prices rose more than 7% to their highest level since June 2015 as U.S. crude fell roughly 1%.