Wall Street took a rest Friday after the sharp rise after rallying on the back of the move by the US Federal Reserve to a more defined rate cut looms stance.
The more obvious stance from the Fed more than offset talk of possible military reaction from the US to Iran’s shooting down on a spy drone.in fact, by Friday’s close and at the weekend Donald Trump seemed to be excusing the Iranian shooting.
Thanks to the Fed’s shift of stance, US shares had a solid week, rising 2.2%, Eurozone shares rose 2.1% off the back of news the European Central Bank will also resume its easing if the eurozone economy weakens further; Japanese shares gained 0.7% with no change in the already easy money stance of the Bank of Japan.
Chinese shares rose 4.9% on suggestions that trade war with the US might see a breakthrough at this week’s Group of 20 nations meeting in Japan.
The Australian share market gained 1.5% as another rate cut from the Reserve Bank became the dominant message.
On Wall Street on Friday, the S&P 500 briefly hit a record high of 2,964.15, but then fell eased as the rising tensions between the US and Iran kept investors on edge.
The S&P 500 index fell 3.72 points, or 0.1%, to 2,950.46, a day after the large-cap index finished at a record. The Dow lost 34.04 points, or 0.1%, to 26,719.13.
The Nasdaq lost 19.63 points, or 0.2%, to 8,031.71.
But despite closing on a weak note, analysts say the Dow has so far recorded its strongest June performance since 1938 (and is up more than 9% so far this month) while the S&P 500 had its best June since 1955 (its up 7.2% so far) and the Nasdaq turned in its biggest June gain since 2000 (and its up around 7.8%).
All three measures were also up for a third week in a row with the S&P 500 gaining 2.20%, the Dow climbing 2.41%, and the Nasdaq adding 3.02%, according to FactSet.
US Treasury yields rose Friday afternoon after President Donald Trump decided not to launch military strikes against Iran in retaliation for shooting down a US drone.
The 10-year Treasury bond yield climbed 6.5 basis points to 2.066%, trimming the benchmark rate’s weekly drop to 2.6 basis points. It staged its biggest daily yield increase since April 1, a day after falling below the 2% level to a two and half year low.
