Stock market: Wall Street rebounds as Treasury yields fall. Moderna soars on the back of its melanoma vaccine
In Milan (-0.7 per cent), MPS could be considering two public offers for BPM and Banca Generali. Global tech stocks are still struggling. Spot gold is nearing $4,500 per ounce
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(Il Sole 24 Ore Radiocor) - The European stock markets are unable to shake off the uncertainties of recent sessions and have closed flat for the fourth consecutive time, weighed down by banks and tech stocks, which are suffering most from the rise in government bond yields (which increase the costs of major investments in AI). Yet, there was a silver lining during the trading session: the US Treasury announced that it would at least double the scale of its buy-back operations designed to support the liquidity of longer-dated nominal securities. Following the announcement, Treasury yields immediately fell sharply, having risen on Tuesday to a 20-year high of 5.3371 per cent. The news also gave a boost to gold, with spot prices edging close to $4,500 an ounce.
Milan thus closed down 0.75 per cent (52,618 points) in a largely flat European market: London up 0.1 per cent, Paris down 0.1 per cent and Frankfurt down around 0.2 per cent. On the geopolitical front, there remains concern over tensions in the Middle East, where a further escalation is feared: US President Donald Trump has stated that no talks with Iran are currently taking place, nor are any planned. The US President has also described the Strait of Hormuz as ‘new US territory’, whilst according to the Financial Times, Tehran is reportedly prepared to strike US military targets in Europe as well.
Wall Street: Moderna soars following news of new vaccine results
On Wall Street, investors were awaiting the publication of the minutes of the Federal Reserve’s latest meeting, from which they hoped to gain clarity on the central bank’s intentions regarding interest rates, particularly now that inflationary fears have resurfaced due to rising energy prices (Brent at around $92, WTI at $86).
Wall Street closed higher. The Dow Jones ended the day up 0.22 per cent at 53,463 points, whilst the S&P500 gained 0.24 per cent to 7,710 points, whilst the Nasdaq rose by 0.16 per cent to 26,331 points.
On the corporate front, shares in Moderna soared from the very start of trading after a experimental melanoma vaccine developed with Merck (up around 10 per cent) has shown positive results in a late-stage trial involving over 1,100 patients. On the other hand, a number of chip stocks are under scrutiny, such as Intel. The Wall Street Journal reported, citing sources, that OpenAI’s second-quarter results showed rising losses, despite revenue growing by 18 per cent from the first quarter. This figure is fuelling concerns about the sector.
