Crude Oil Prices Fuel Rally in Stocks Ahead of US-China Summit
The S&P 500 Index and Nasdaq 100 Index are rising today, with the S&P 500 posting a 1.5-week high and the Nasdaq 100 posting a 5-week high.
Stocks are finding support on weakness in crude oil prices, which has pushed bond yields lower and improved market sentiment. WTI crude is down more than -3% at a 1-week low, and the 10-year T-note yield is down -3 bp to 4.96%.
The positive anticipation ahead of a summit later this week between Presidents Trump and Xi Jinping is lifting equity markets, as well as support from a rally in chipmakers and AI-infrastructure stocks, along with a rally in cryptocurrency-exposed stocks as Bitcoin's price surges to a 7.5-month high.
Hawkish comments today from Chicago Fed President Austan Goolsbee were negative for stocks and bonds when he said that to restore price stability, the Fed may need to raise interest rates further and narrow the gap between supply and demand, which could lead to drops in employment, wages, and growth.