By Elizabeth Dilts Marshall
NEW YORK, May 13 (Reuters) – Global shares rose on Friday as Wall Street rallied to end a volatile week of trading, while oil jumped 4% on the back of record-high U.S. gas prices.
Global markets and U.S. stocks were down sharply most of this week as investors grew anxious about the possibility of recession. The S&P 500 index .SPX is off nearly 20% from its all-time high in January and was close to a bear market on Thursday. .N
But investors’ fears over whether U.S. Federal Reserve Chair Jerome Powell can accomplish a “soft landing” – bringing inflation down while keeping the U.S. economy growing – appeared to ease at least temporarily on Friday.
MSCI’s gauge of stocks across the globe .MIWD00000PUS gained 2.30% at 4:07 p.m. ET (2007 GMT), after hitting its lowest since November 2020 on Thursday. The pan-European STOXX 600 index .STOXX rose 2.14%.
According to preliminary data, the S&P 500 .SPX gained 94.57 points, or 2.41%, to end at 4,024.65 points, while the Nasdaq Composite .IXIC gained 436.61 points, or 3.84%, to 11,807.57. The Dow Jones Industrial Average .DJI rose 466.43 points, or 1.47%, to 32,196.73.
Despite Friday’s gains, the S&P 500 and the Nasdaq posted their sixth consecutive weekly loss, and the Dow notched its seventh consecutive weekly dip.
Emerging market stocks rose 1.83%. MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rallied 2.01% from Thursday’s 22-month closing low. Japan’s Nikkei .N225 rose 2.64%.
“Stocks were ready to rebound as some investors remain hopeful the Fed will deliver a soft landing, while others are ready to buy the dip,” said Edward Moya, analyst at OANDA.
Cryptocurrencies steadied on Friday, with bitcoin recovering from a 16-month low after a volatile week dominated by the collapse in value of TerraUSD, a so-called stablecoin.
Bitcoin BTC=BTSP, the largest cryptocurrency by market value, rose 3.5% to $29,884, rebounding from a December 2020 low of $25,400 hit on Thursday. Bitcoin remains far below week-earlier levels of around $40,000 and is on track for a record seventh consecutive weekly loss.
Oil prices jumped 4% as U.S. gasoline prices jumped to a record high and China looked ready to ease pandemic restrictions.
Brent LCOc1 futures rose $4.10, or 3.8%, to settle at $111.55 a barrel. U.S. West Texas Intermediate (WTI) crude CLc1 rose $4.36, or 4.1%, to settle at $110.49.
Markets are likely to experience a short-term rebound before resuming the sell-off which has sent Wall Street’s Nasdaq tech index .NDX down over 25% since the beginning of the year, BofA analysts wrote in a weekly strategy note.
Investors liquidated global equity funds worth $10.53 billion in the week ended May 11, compared with $1.65 billion of net selling in the previous week, according to Refinitiv Lipper.
In an interview late on Thursday, Powell said the battle to control inflation would “include some pain,” and he repeated his expectation of half-percentage-point interest rate rises at each of the Fed’s next two policy meetings.
Headline inflation in the euro zone will fall in the second half of the year but so-called core prices, which strip out food and energy, will keep rising, the European Central Bank’s vice-president Luis de Guindos said on Friday.
The dollar was lower on Friday but remained on track for a weekly gain. The dollar index =USD fell 0.2%, with the euro EUR= up 0.21% to $1.0401.
The Japanese yen weakened 0.77% versus the greenback at 129.32 per dollar, while sterling GBP= was last trading at $1.2232, up 0.27% on the day.
The moves higher in equities were mirrored in U.S. Treasuries, with the benchmark U.S. 10-year yield US10YT=RR edging up to 2.9367% from a close of 2.817% on Thursday.
The policy-sensitive 2-year yield US2YT=RR was 2.5986%, from a close of 2.522%.
Gold fell more than 1% on Friday and is set for its fourth straight weekly decline, as the dollar’s strength sapped appetite for bullion. Spot gold XAU= dropped 0.8% to $1,807.79 an ounce. U.S. gold futures GCc1 fell 0.59% to $1,807.40 an ounce.
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
MSCI All Country World Index Market Caphttp://tmsnrt.rs/2EmTD6j
S&P 500 set for a sixth straight week of fallshttps://tmsnrt.rs/3sztbhr
(Reporting by Elizabeth Dilts Marshall; Additional reporting by Carolyn Cohn in London and Andrew Galbraith in Shanghai and Dhara Ranasinghe in London; Editing by Jane Merriman, Nick Zieminski and Richard Chang)
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