Global shares hit a record high Wednesday after data showed U.S. consumer price increases slowed in July, easing concerns that the Federal Reserve will imminently signal a scaling back of bond purchases.
Some investors believed the data showed tentative signs inflation has peaked as supply-chain disruptions work their way through the U.S. economy.
“This is a more moderate reading than expected, especially on the core,” said Gennadiy Goldberg, an interest rate strategist at TD Securities in New York.
Speculation has mounted that the Fed will signal timings on tapering stimulus at a meeting of central bankers in Jackson Hole, Wyoming, on August 26-28. Stronger-than-expected inflation data would have fuelled that talk.
U.S. non-farm payrolls figures due in September could also influence tapering if they are particularly strong.
It may take a few months more for the U.S. job market to recover enough that the Federal Reserve can reduce its crisis-era support for the economy, Richmond Federal Reserve Bank President Thomas Barkin told Reuters.
The MSCI all-country index, a gauge of stocks across the globe, rose 0.27% to a fresh record high.
The Dow Jones Industrial Average and S&P500 also hit record highs in early trade with sentiment boosted by U.S. lawmakers approving a trillion-dollar infrastructure package Tuesday.
The Dow Jones Industrial Average rose 210.55 points, or 0.6%, to 35,475.22, the S&P 500 gained 10.38 points, or 0.23%, to 4,447.13 and the Nasdaq Composite dropped 11.09 points, or 0.07%, to 14,777.00.
In Europe, the STOXX index of leading companies hit a new peak for an eighth consecutive session as more acquisitions and steady corporate earnings underpinned the economic outlook.
OIL DIPS, DOLLAR GAINS
Crude oil prices fell below $ 70 a barrel, pressured by a CNBC report that the White House will call on OPEC and its allies to boost production in an effort to combat escalating gasoline prices.
U.S. crude fell 1.46% to $ 67.29 per barrel and Brent was at $ 69.55, down 1.53% on the day.
The dollar index fell 0.091%, with the euro up 0.09% to $ 1.1729.
Benchmark 10-year notes were last down 4/32 in price to yield 1.3557%, from 1.342% late on Tuesday.
Asian shares had slipped as fears about further waves of the coronavirus dampened a positive lead from Tuesday’s record close on Wall Street.
MSCI’s broadest index of Asia-Pacific shares outside Japan lost 0.3%.
“What’s clearly separating Asian shares from Wall Street is the difference in vaccination. Low vaccination rates in Asia are proving to be fatal in dealing with the Delta variant,” said Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities.
The Delta variant of the new coronavirus is spreading quickly in many Asian countries, raising fears about local restrictions on travel and other activity damaging the economic recovery.
Spot gold added 0.8% to $ 1,742.70 an ounce. U.S. gold futures gained 0.56% to $ 1,738.50 an ounce.