US stocks edged higher, while Treasuries advanced as investors weighed key developments that continue to raise doubts about the strength of the global economy.
The S&P 500 clung to a slight gain as an unexpectedly soft inflation reading potentially boosted the Federal Reserve’s new wait-and-see approach to rate hikes.
Minutes from the central bank’s last policy meeting when it struck a freshly dovish tone were due in New York.
Banking shares turned lower as heads of major lenders testified before a Congressional committee and the 10-year Treasury yield fell below 2.48 percent. Boeing continued its slide, weighing on the industrials sector and helping to pull down the Down Jones Industrial Average.
The dollar gained versus the euro after the European Central Bank reiterated its warnings that global risks continue to batter the region’s economy as it signalled no rate hikes for the rest of 2019.
The pound advanced as the European Union looked likely to delay Brexit for up to a year at its emergency summit in Brussels.
The weaker-than-expected inflation data heighten the attention that will be paid to the Fed’s minutes on Wednesday, as investors try to gauge what it will take to budge the central bank out of its steady approach. But sentiment remains fragile after the ECB’s and IMF’s somber economic reports, and amid an escalation of the US-EU trade dispute while negotiations with China remain unsettled. Still, most see the world economy on a path of growth this year.
“People shouldn’t panic over growth downgrades because they’re still positive and they’re still growth,” Randy Frederick, the vice president of trading and derivatives at Charles Schwab, said in an interview at Bloomberg’s New York headquarters.
“When we get to the point where we’re talking about contraction, that’s when you’ve got a big problem and we’re a long way from that.”
Elsewhere, oil futures gained as speculation that supplies will tighten outweighed Russian caution on more output cuts. Emerging-market stocks advanced for a 10th day, extending their longest run since January 2018.
US banks begin reporting first-quarter earnings, led by JPMorgan and Wells Fargo.
The spring meetings of the World Bank Group and the IMF continue in Washington. The Federal Reserve was expected to release minutes of its March meeting on Wednesday.
The S&P 500 gained 0.1 percent in New York. The Dow Jones Industrial Average fell 0.1 percent. The Stoxx Europe 600 Index rose 0.3 percent. The MSCI Emerging Market Index jumped 0.3 percent, hitting the highest in almost 10 months.
The Bloomberg Dollar Spot Index rose less than 0.05 percent. The euro fell 0.2 percent to $1.1241. The British pound increased 0.2 percent to $1.3077. The Japanese yen gained 0.1 percent to 111.06 per dollar.
The yield on 10-year Treasuries fell two basis points to 2.48 percent. Germany’s 10-year yield fell two basis points to -0.03 percent. Britain’s 10-year yield dropped less than one basis point to 1.119 percent. Japan’s 10-year yield fell one basis point to -0.053 percent.
West Texas Intermediate crude increased 0.5 percent to $64.30 a barrel.
Gold was little changed at $1,308.80 an ounce. The Bloomberg Commodity Index rose less than 0.1 percent.