NEW YORK (May 14): Global shares rose on Friday (May 13) as Wall Street rallied to end a volatile week of trading, while oil jumped 4% on the back of record-high US gas prices.
Global markets and US stocks were down sharply most of this week as investors grew anxious about the possibility of recession. The S&P 500 Index was off nearly 20% from its all-time high in January and was close to a bear market on Thursday.
But investors' fears over whether US Federal Reserve chair Jerome Powell can accomplish a "soft landing", bringing inflation down while keeping the US economy growing, appeared to ease at least temporarily on Friday.
MSCI's gauge of stocks across the globe had gained 2.3% at 4.07pm ET (2007 GMT) after hitting its lowest since November 2020 on Thursday. The pan-European STOXX 600 Index rose 2.14%.
According to preliminary data, the S&P 500 gained 94.57 points, or 2.41%, to end at 4,024.65 points, while the Nasdaq Composite gained 436.61 points, or 3.84%, to 11,807.57. The Dow Jones Industrial Average rose 466.43 points, or 1.47%, to 32,196.73.
Despite Friday's gains, the S&P 500 and the Nasdaq posted their sixth consecutive weekly loss, and the Dow notched its seventh consecutive weekly dip.
Emerging-market stocks rose 1.83%. MSCI's broadest index of Asia-Pacific shares outside Japan rallied 2.01% from Thursday's 22-month closing low. Japan's Nikkei rose 2.64%.
"Stocks are ready to rebound as some investors remain hopeful the Fed will deliver a soft landing, while others are ready to buy the dip," said Edward Moya, an analyst at OANDA.
Cryptocurrencies steadied on Friday, with Bitcoin recovering from a 16-month low after a volatile week dominated by the collapse in value of TerraUSD, a so-called stablecoin.
Bitcoin, the largest cryptocurrency by market value, rose 3.5% to US$29,884 (about RM131,430), rebounding from a December 2020 low of US$25,400 hit on Thursday. Bitcoin remained far below week-earlier levels of around US$40,000 and was on track for a record seventh consecutive weekly loss.
Oil prices jumped 4% as US gasoline prices jumped to a record high and China looked ready to ease Covid-19 pandemic restrictions.
Brent futures rose US$4.10, or 3.8%, to settle at US$111.55 a barrel. US West Texas Intermediate crude rose US$4.36, or 4.1%, to settle at US$110.49.
Markets are likely to experience a short-term rebound before resuming the sell-off, which has sent Wall Street's Nasdaq tech index down over 25% since the beginning of the year, BofA analysts wrote in a weekly strategy note.
Investors liquidated global equity funds worth US$10.53 billion in the week ended May 11, compared with US$1.65 billion of net selling in the previous week, according to Refinitiv Lipper.
In an interview late on Thursday, Powell said the battle to control inflation would "include some pain", and he repeated his expectations of half-percentage-point interest rate rises in each of the Fed's next two policy meetings.
Headline inflation in the eurozone will fall in the second half of the year but so-called core prices, which strip out food and energy, will keep rising, European Central Bank vice-president Luis de Guindos said on Friday.
The dollar was lower on Friday but remained on track for a weekly gain. The dollar index fell 0.2%, with the euro up 0.21% at US$1.0401.
The Japanese yen weakened 0.77% versus the greenback at 129.32 per dollar, while sterling was last trading at US$1.2232, up 0.27% on the day.
The moves higher in equities were mirrored in US Treasuries, with the benchmark US 10-year yield edging up to 2.9367% from a close of 2.817% on Thursday.
The policy-sensitive two-year yield was 2.5986% from a close of 2.522%.
Gold fell more than 1% on Friday and was set for its fourth straight weekly decline as the dollar's strength sapped appetite for bullion. Spot gold dropped 0.8% to US$1,807.79 an ounce. US gold futures fell 0.59% to US$1,807.40 an ounce.