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S&P 500, Nasdaq Close at Records as Rates Slump Brings Joy to Tech

Stock Markets Jul 07, 2021 04:44PM ET
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© Reuters.

By Yasin Ebrahim

Investing.com – The S&P 500 and Nasdaq closed at record highs Wednesday, as falling yields lifted tech stocks while the Fed's June meeting pointed to a lack of cohesion among members on when the central bank should begin tapering its bond purchases.   

The S&P 500 rose 0.3% to a record of 4,358.13. The Dow Jones Industrial Average gained 0.30%, or 104 points, the Nasdaq was up 0.1% to a record 14,665.1.

Federal Reserve policymakers generally agreed that the threshold to begin scaling back its monthly bond purchases had not yet been met, according to the Fed's June meeting minutes released Wednesday. But there was uncertainty on when conditions to taper will met as some members expected the threshold to be met earlier than expected, while others preferred to wait for incoming economic data.          

"The Committee's standard of 'substantial further progress' was generally seen as not having yet been met, though participants expected progress to continue," the minutes showed. There were, however, various participants that expected the conditions for the taper threshold to be "met somewhat earlier than they had anticipated at previous meetings in light of incoming data."

The uncertainty of the timing of tapering drew a muted reaction in markets as U.S. bond yields remained near the lows of the day. The plunge in bond yields has been largely attributed to concerns over peak growth and inflation, but some suggest the downward a spiral is more structural rather than fundamental as investors have been forced to unwind their bearish bets on bonds. 

"A lot of people were maybe late to the game putting that short position in Treasuries on, and now we've basically seen a lot of shorts unwind that has exacerbated the move downward," John Luke Tyner, Portfolio Manager at Aptus Capital Advisors said in an interview with Investing.com on Wednesday.

Against the backdrop of falling bond yields, meanwhile, growth corners of the market like tech continued to rack up gains, though social media stocks were lagging behind.

Facebook (NASDAQ:FB) remained below the flatline after former President Donald Trump said he is filing a class-action lawsuit against the social media giant and other tech giants including Twitter and Google as well as their chief executives because of bans imposed on him and others.

Google-parent Alphabet (NASDAQ:GOOGL) recovered losses, while Twitter (NYSE:TWTR) fell 2%.

Materials and industrials, meanwhile, were also among the biggest sector gainers, while energy slipped further into the red after oil prices reversed gains.

Oil prices continue to lose ground as the failure of OPEC+ to agree a new output plan, stoked concerns that members of the production-cut accord may break away from the agreement, potentially leading to uptick in global supplies.

S&P 500, Nasdaq Close at Records as Rates Slump Brings Joy to Tech
 

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Comments (5)
ZS Beck
ZS Beck Jul 07, 2021 9:13PM ET
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Is there anyone out there buying treasury? 1.3%? The only buyer is the FED.
New Jazenevd
New Jazenevd Jul 07, 2021 5:14PM ET
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The market is unstoppable, the same as money printing.
Meru Pet
Meru Pet Jul 07, 2021 5:14PM ET
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Is it a good idea to invest in Kimberly Clark when there are so money bills around ?
Meru Pet
Meru Pet Jul 07, 2021 5:14PM ET
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*so many banknotes...
Mitchel Pioneer
Mitchel Pioneer Jul 07, 2021 5:03PM ET
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Welcome to the greatest financial fraud in world history, the US Ponzi Scheme.
Meru Pet
Meru Pet Jul 07, 2021 5:03PM ET
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technically, it's not
Meru Pet
Meru Pet Jul 07, 2021 5:03PM ET
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vote -1, but it is still not
Sam Gates
Sam Gates Jul 07, 2021 5:00PM ET
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All lies . Tech will slump hard . Market is manipulated. So many stocks declined today and delta id coming. Stay long and burn this article.
Mario tragik
Mario tragik Jul 07, 2021 5:00PM ET
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most than likely unloading inventory at high prices on "optimistic" news. we have seen this traps time and time again not complaining its just part of the game.
Prakash J Chaudhari
Prakash J Chaudhari Jul 07, 2021 5:00PM ET
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You hit the nail. It is a war against regular retail investors !
Meru Pet
Meru Pet Jul 07, 2021 5:00PM ET
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sorry but if i didn't follow the market, i understand its rational. It's fear of fed and fear of covid.
chris hafferty
chris hafferty Jul 07, 2021 5:00PM ET
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Been hearing the same negative market meme for ten years. My investments are up almost 4x.
Ron Love
Ron Love Jul 07, 2021 5:00PM ET
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*some tech* Most of tech got wrecked.
Meru Pet
Meru Pet Jul 07, 2021 5:00PM ET
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most by market capitalisation? i dont think so. Just check apple and Amazon (at least yesterday)
Meru Pet
Meru Pet Jul 07, 2021 5:00PM ET
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+alphabet +Microsoft
 
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