U.S. stocks posted modest weekly gains, reversing the negative trend of the previous week. There was a wide divergence across the major U.S. indexes, with the NASDAQ gaining nearly 5%, the S&P 500 adding 2%, and the Dow rising less than 1%.
Yield Curve Inversion
For the second time this year, the yield curve inverted, as the yield of the 2-year U.S. Treasury bond on Tuesday rose above the yield of the 10-year bond. Such an inversion is an indicator of concerns about short-term interest-rate increases as well as the possibility that a recession could loom ahead. The curve also briefly inverted in early April.
A Consumer Price Index report scheduled to be released on Wednesday will show whether the U.S. economy got any relief last month from surging inflation. In May, inflation accelerated at an 8.6% annual rate the highest since 1981 and above the previous month’s 8.3% figure.
The year-to-date strengthening of the U.S. dollar relative to the euro has brought the value of the two currencies to a near-parity level for the first time in two decades. On Friday morning, the value of a single euro fell as low as $1.008. The last time the two currencies reached parity was in late 2002.
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