U.S. stocks opened higher on Friday ahead of the Memorial Day weekend, a day after the three major averages closed in the red on the back of a bond selloff sparked by economic data that showed that inflation remained sticky.
Minutes after the opening bell, the Dow (DJI) was +0.1%, the S&P 500 (SP500) was +0.3%, and the Nasdaq Composite (COMP:IND) was +0.4%.
The 10-year Treasury yield (US10Y) was up 2 basis points to 4.50%, while the 2-year yield (US2Y) was up 1 basis point to 4.96%. See how Treasury yields have done across the curve at the Seeking Alpha bond page.
Thursday marked the worst session in more than a year for the Dow, as it shed 600 points.
“It was a fascinating day yesterday as a barnstorming reaction to Nvidia’s results clattered headfirst into stronger data and rising yields, with the negative impact of the latter winning out with the S&P 500 and the Nasdaq seeing its worst day of May so far,” Deutsche Bank’s Jim Reid said.
“So the data yesterday suggests there’s little urgency for the Fed to cut rates anytime soon,” he added.
Data from S&P Global showed that U.S. business activity in May grew at its fastest rate since April 2022. Input prices also continued to rise sharply in May, with the rate of inflation accelerating to register the second-largest monthly increase over the past eight months.
April durable goods orders rose more than expected, and came in at +0.7% M/M vs. -0.9% expected and +0.8% prior (revised from +2.6%), while core durable goods came at +0.4% M/M vs. +0.1% expected and +0.2% prior.
The Michigan consumer sentiment report for May is slated to land during market hours, and is expected to drop to 67.4.
“Michigan consumer confidence data is just noise, but it is always entertaining to check in on the political polarization represented by the gulf between Democrat and Republican views,” UBS’ Paul Donovan said.
