U.S. stocks ticked higher Wednesday, as technology stocks led the way to tepid early gains.
The S&P 500 edged up 0.2%, trading above its record close of 4232.6, set on May 7. On Tuesday, it ground up for its third-highest close on record. The Nasdaq Composite Index rose 0.5%, suggesting technology stocks could have a strong day. The Dow Jones Industrial Average slipped less than 0.1%.
The S&P 500 has been subdued for much of the last two weeks as investors weigh the reopening of the economy with rising inflation and supply chain concerns. The onset of summer months is prompting people to start using vacation days, leading to thinner trading volumes, money managers said.
“We’ve seen very low volatility over the past week,” said John Roe, head of multiasset funds at Legal & General Investment Management. “As we get into the warmer weather, we have less market participants and a less volatile environment. This reduces liquidity.”
Some so-called meme stocks that have gained popularity on online forums surged higher.
is up another 13% in early trading after surging 86% on Tuesday.
though fell 1%. The videogame retailer is set to report earnings after market hours.
“We see some areas where the popular stocks are starting to make up bigger parts of the overall index or subindex,” said Shaniel Ramjee, a multiasset fund manager at Pictet Asset Management. “You now have to think, could an area that I might be pessimistic on, could it outperform because of this?”
Worries about runaway inflation have abated in recent days, although investors remain on watch for fresh data on inflation in May that is due Thursday.
“The debate around how persistent inflation is and will be for the coming months is key. This might create some volatility,” said
head of private banking investments at SYZ Private Banking. Last month’s “higher than expected [consumer-price index] figures triggered quite a bit of market stress,” he added.
Fresh data Wednesday showed a higher-than-expected spike in China’s producer prices in May, driven by a rise in commodity prices. The consumer-price index came in below forecasts, signaling that the higher costs haven’t yet been passed onto consumers.
“When you look at the global inflation picture, it is very interesting to see that actually, inflation isn’t such a problem currently in Asia,” Mr. Filip said.
In bond markets, the yield on the benchmark 10-year U.S. Treasury note declined to 1.487%, from 1.527% on Tuesday.
“This is about positioning,” said
investment manager at Abrdn Standard Investments. “There is a big risk event coming up with CPI, people aren’t incentivized to add a lot of risk into the event.”
Bitcoin rose over 3% from Tuesday’s 5 p.m. ET level to trade at about $34,900, according to CoinDesk.
Overseas, the pan-continental Stoxx Europe 600 was relatively flat after notching a fresh record on Tuesday.
The Shanghai Composite Index ticked up 0.3% by the close of trading, while Hong Kong’s Hang Seng Index edged down 0.1%. Japan’s Nikkei 225 slid 0.4%.
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