(Bloomberg) -- U.S. stocks edged higher, stalling below all-time highs as investors saw few reasons to pile in after a furious five-week rally. The dollar and Treasuries rose.
Th S&P 500 erased earlier losses to push gains to a second day, lead by defensive utility and real estate shares. The benchmark remained below yesterday’s mid-session record reached as part of a more than 7% rally since the start of October, fueled by hopes of a U.S.-China trade deal, waning recession fears and rate cuts.
Inflation data Wednesday did little to alter the view that the Federal Reserve is done easing and in no rush to hike as prices continue to rise at a tepid pace. Chairman Jerome Powell reinforced that thinking in his address to Congress, saying the Fed’s current policy is appropriate as long as the economy stays on track.
The 10-year Treasury yield fell the most in more than a week, while the dollar rose for the seventh time in eight sessions to the highest in a month. The yen advanced along with gold. West Texas crude rose to $57 a barrel.
“A couple of weeks ago, it looked like that phase one deal looked all but certain. I think the market started to price in a really positive outcome on the trade side,” said Jeff Mills, chief investment officer at Bryn Mawr Trust. “Although I do think that progress is moving in a positive direction, I think it would be foolish for us to assume that we’re going to move completely in a positive direction in trade without any type of intermittent setbacks.”
The prospect of a deal between the world’s two biggest economies has become key to sustaining a rally that drove American stocks to records, as it appears the Fed will be on the sidelines for a long time. The U.S. and China have yet to announce a new location or time to seal the agreement after an international gathering in Chile was canceled, and it’s unclear whether Trump’s renewed threats will move things forward.
Elsewhere, emerging-market shares fell as Hong Kong’s benchmark stocks gauge slumped as the city endured a third day of unrest. Japanese shares retreated along with those in South Korea and Australia. New Zealand’s dollar jumped after the country’s central bank unexpectedly kept interest rates unchanged.
- The S&P 500 Index rose 0.1% as of 12:37 p.m. New York time.
- The Stoxx Europe 600 Index declined 0.3%.
- The U.K.‘s FTSE 100 Index declined 0.2%.
- The MSCI Emerging Market Index sank 1.2%.
- West Texas Intermediate crude declined 1% to $57.38 a barrel.
- Gold climbed 0.4% to $1,462.20 an ounce.