U.S. stocks closed solidly higher on Thursday, 6 June 2019 following after reports that Trump administration is considering delaying a planned 5% tariff on all imports from Mexico, as discussions continue over how to stop the flow of Central American migrants to the U.S. border.
The Dow Jones Industrial Average rose 181.10 points, or 0.7%, at 25,720.66. The S&P 500 index rose 17.34 points, or 0.6% to 2,843.49, while the Nasdaq Composite Index added 40.08 points, or 0.5%, to reach 7,615.55.
Each of the major benchmarks spent time in the red Thursday, with the Dow fall 21.52 points or 0.1% lower to 25518.05, the S&P 500 trading as low as 2822.4, a loss of 3.71 points, also 0.1%. At session lows, the Nasdaq fell as many as 29.25 points, or 0.4% at 7,546.23.
Wall Street was heartened by a report Thursday afternoon that new tariffs on Mexican imports may not go into effect, and if they do, will be short lived.Sentiment was also buoyed by rhetoric from central bankers, including the European Central Bank's, which was interpreted by some as dovish. The ECB left its overnight deposit interest rate at minus 0.4%, while extending its forecast for how long it will keep rates this low into at least the first half of 2020. The ECB had previously indicated rates would remain on hold through the end of 2019.
The central bank run by President Mario Draghi also provided more details on its bank-lending program, known as TLTROs, which aren't as generous as previous iteration of the program. Draghi also said that the decision to keep rates unchanged until next year doesn't preclude more stimulus, if the European economy deteriorates significantly.
Recent U.S. economic data mostly raised concerns over a slowdown. The Fed's Beige Book late Wednesday showed the U.S. economy expanded at “a modest pace overall” from April to mid-May, but growth was partly held in check by labor shortages and worries over tariffs on China.
Traders await the latest monthly look at U.S. jobs growth due Friday, following a report Wednesday that revealed private-sector job growth eased to a nine-year low in May.
Shorter-dated U.S. Treasuries backtracked from yesterday's advance, pushing the 2-yr yield up five basis points to 1.89%. The 10-yr yield finished unchanged at 2.12% for the second straight day.
After spending much of Thursday's session struggling for direction, oil futures climbed sharply by the settlement on Thursday, 06 June 2019, as a report that the U.S. may delay tariffs on Mexico helped ease concerns over trade tensions that threaten to hurt energy demand. The move comes a day after U.S. benchmark crude entered a bear market on the back a report showing domestic supplies hit a nearly two-year high.
West Texas Intermediate crude for July delivery rose 91 cents, or 1.8%, to settle at $52.59 a barrel on the New York Mercantile Exchange. It had been trading modestly lower just 15 minutes before the settlement. WTI prices Thursday, however, remained more than 20% below the most recent high of $66.30. International benchmark August Brent rose $1.04, or 1.7%, to $61.67 a barrel on ICE Futures Europe, after an earlier fall to as low as $60.22.
Bullion prices ened higher at Comex on Thursday, 7 June 2019. Gold futures gained Thursday, stretching their advance to a seventh straight session, with market expectations for a Federal Reserve interest-rate cut this year building in the lead-up to Friday's closely watched nonfarm payrolls report.
Gold for August delivery on Comex rose $9.10, or 0.7%, to settle at $1,342.70 an ounce. The precious metal has now posted gains for seven consecutive trading sessions. Gold has seen a more than 3% year-to-date advance, and trades 2.4% higher for the week so far. July silver added 11.4 cents, or 0.8%, to $14.905 an ounce, up some 2.3% in the week so far.
Looking ahead, investors will receive the Employment Situation Report for May, Wholesale Inventories for April, and the Consumer Credit report for April on Friday.