Markets

Close Update: Wall Street Applauds Yellen's Omission of Rate Hike Timing

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Stocks closed with sizeable gains on Monday after Fed Chair Janet Yellen gave a mostly upbeat speech regarding the U.S. economy, but backed off on earlier projections for a June rate hike. The notable omission of a time frame to the next tightening sent the Dow Jones Industrial Average to a five-week high and the S&P 500 to its highest level since November.

Wall Street was already trading higher ahead of Yellen's speech in anticipation that Friday's dismal employment report would encourage the Fed Chair to back off rate hike projections for June or July. The headlines were mostly favorable to the financial markets as Yellen acknowledged that the May payroll data was "disappointing" and global risks from Brexit and China could result in "economic repercussions" in the U.S.

But Yellen also gave props to other indicators that show strength in the labor market, and lingering expectations for inflation to reach 2%. Wall Street was especially encouraged that Yellen left-off any reference to the time-frame for a tightening as she had in previous remarks.

With a June and possibly July rate hike off the table, the dollar weakened against a basket of currencies, gold failed to breach $1,250 per ounce, and Treasury yields rose as much as 3 basis points in the long end, steepening the slope of 2/10 yield curve.

Monday's economic calendar was exceptionally thin with only the May labor market conditions index. In respect of the underwhelming 38,000 gain in May non-farm payrolls, the index plummeted to negative 4.8 in May from a downward revised negative 3.4 the month prior, missing estimates for negative 0.8.

Tuesday's calendar is also light with only Q1 non-farm productivity (expected -0.6%) and unit labor costs (+4.1%), as well as consumer credit (expected to increase by $18 billion).

Here's where the markets stood at the close:

US MARKETS

Dow Jones Industrial Index was up 113.27 points (+0.64%)

S&P 500 was up 10.28 points (+0.49%)

Nasdaq Composite Index was up 26.20 points (+0.53%)

GLOBAL SENTIMENT

FTSE 100 was up 1.03%

Nikkei 225 was down 0.37%

Hang Seng Index was up 0.40%

Shanghai China Composite Index was down 0.16%

UPSIDE MOVERS

(+) HMNY (+548.26%) Announced plans to merge with Zone Technologies

(+) VBLT (+72.54%) Ovarian cancer study shows significant increase in overall survival

(+) CYCC (+42.26%) Phase 1 data on combination of two product candidates showed anti-tumor activity

(+) MOC (+28.22%) May compete for $3.3 billion in DHS task orders

(+) YGE (+25.00%) Post first quarterly profit since 2011

DOWNSIDE MOVERS

(-) DNAI (-67.55%) Suspends development of PNT2258 in wake of Wolverine Phase 2 trial

(-) ADMP (-53.84%) Advised by the FDA to expand human study for Epinephrine injection

(-) MRTX (-44.41%) Provided an update on clinical program in patients with non-small cell lung cancer

(-) OCUL (-42.53%) Phase 3 trial of Dextenza for allergic conjunctivitis did not meet primary endpoints

(-) IMMU (-13.72%) IMMU-132 antibody-drug conjugate shrank tumors by 30% or more

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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