US stocks had a good night with a broad recovery in tech

Two-year treasury yield declines on weakening labor market signals

By Nadia Elbilassy | @Nadia Elbilassy | 3 July 2023

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  • US stocks regained losses as technology stocks rebounded, driving a positive market performance ahead of an eventful economic and policy calendar

  • The two-year Treasury yield declined to 4.51% following an increase in weekly jobless claims, signaling a weaker labor market.

US Stocks

US stocks recouped losses as technology stocks rebounded primarily driven by a recovery in technology stocks. Simultaneously, volatility reached unprecedented lows, indicating a decrease in market uncertainty. This positive performance occurred in anticipation of a busy economic and policy calendar scheduled for the upcoming week. Inc saw a 2.49% increase in its stock price as Wells Fargo began covering the company and assigned it an "overweight" rating.

Following a notable increase in weekly jobless claims, indicating a weakening labor market, the two-year Treasury yield, often influenced by short-term rate expectations, declined from its one-week high to 4.51%.

On June 13, coinciding with the start of the Federal Reserve meeting, the U.S. Labor Department is scheduled to release inflation data. Although it is anticipated that consumer prices moderated slightly in May, core prices are expected to have remained stubbornly high.

The Dow Jones rose 168 points to 33,833.61. while the S&P 500 rose to 4,281.

Gold prices back above $1960

Analysts from Citi and Commerzbank commented on Thursday that a pause by the Federal Reserve is expected to bring some positive trends for gold.

Since mid-May, gold has remained within a narrow trading range, mainly due to uncertainty surrounding the Fed and the overall economy. This followed a decline below the significant $2,000 per ounce level that is closely monitored by investors.

Nevertheless, if economic conditions deteriorate further this year, the demand for gold as a safe haven asset could increase, particularly if a pause in the Fed's rate hike cycle weakens the U.S. dollar.