Market Update & Important Indicators
U.S. stocks fell Tuesday, but the S&P 500 was on track for a monthly gain. Investors' new expectations for the pace of U.S. interest-rate increases changed the complexion of the markets in May, with many pivoting from worries that rising rates would hurt stocks to embracing them as a sign of a more robust economy. Midway through the month, major indexes gave up much of their gains for the year after improving U.S. economic data and a handful of upbeat comments from Federal Reserve officials signaled that a rate rise could come as soon as June. Now the Dow industrials have gained around 1.8% in 2016, while the S&P 500 is up more than 2%. Financial shares in the S&P 500 climbed 1.6%, with investors saying higher interest rates could boost profits at banks.
European stocks broke a five-session winning run, with car makers helping to drive the market lower. The Stoxx Europe 600 index fell 0.8% to end at 347.45. however, the pan-European benchmark nabbed a 1.8% advance, representing its best monthly performance since November.
Shares in Asia mostly advanced Tuesday, led by a 3.3% rise in the Shanghai Composite Index, its largest daily gain since March. Investors in the region hoped mainland-traded Chinese stocks may soon appear in the MSCI Emerging Markets Index, an influential global benchmark which could draw billions of dollars into Chinese equities. Earlier, the CSI 300 index futures contract due in June suddenly plunged 10%, but quickly bounced back to reverse losses in less than a minute. Stocks in Japan added 1% after data showed a continued recovery in Japanese industrial production.
Australian shares snapped a four-day run higher as oil stocks led a broad decline Tuesday, although the market still managed a third consecutive monthly advance. Stock markets across the region received little guidance from global markets, with the U.S. and U.K. closed for public holidays Monday. After climbing to a nine-month high and edging above the psychologically key 5400 mark this week, the S&P/ASX 200 fell 29.4 points, or 0.5%, to finish at 5378.6. Still, the index rose 2.4% for May after gaining 3.3% the month before and 4.1% in March. Energy stocks led Tuesday's drop, with the sub-index losing 1.5%, while the basket of consumer staples shares lost 1.4% and financials eased 0.5%.
The London Metal exchange's three-month copper contract was down 0.5% at $4,697 a ton at the PM kerb close. Other base metals were mixed. Aluminium was down 0.5% at $1,544.00 a ton; zinc was up 1.1% at $1,923 a ton; and nickel was up 0.1% at $8,389 a ton.
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