Asia Shares Set for Choppy Trading, S&P 500 Hits Record High

Asian equities will see a choppy session on Friday, with the S&P 500 hitting a record high. Technology stocks lifted the index even as investors assessed an unexpected rise in filing new claims for unemployment benefits.

On Thursday, U.S. jobless claims report showed a second straight weekly increase in the number of Americans filing for new claims. It was countering the streak of strong economic data from payrolls and job vacancies. 

The softer data helped to pull down yields on the benchmark 10-year U.S. Treasury note to its lowest level since March 26. Also, to spur demand for high growth stocks in the technology sector. 

The tech sector is the biggest gainer in the S&P 500. Moreover, on Thursday, the Nasdaq closed at a seven-week high.

Tim Ghriskey, a chief investment strategist at Inverness Counsel in New York, said jobless claims set a market tone. He added that perhaps things are not as strong as people think and that they’re still ways away from a recovery.

On Thursday, U.S. Federal Reserve Chairman Jerome Powell hinted that the central bank is nowhere near reducing its support for the U.S. economy. He said at an International Monetary Fund (IMF) event that the economic reopening could result in a momentary surge in prices. But he expects it to be temporary, and it will not constitute inflation. 

His comments were reaffirming the accommodative stance outlined in the Fed’s policy meeting minutes published on Wednesday.

Stocks on The Move

In early trading, Australia’s S&P/ASX 200 futures crept 0.03% higher, while Hong Kong’s Hang Seng index futures crept 0.17% lower. Japan’s Nikkei 225 futures edged up 0.45%.

Supported by the further pullback in yields, traders piled into mega-cap tech stocks like Apple Inc, Microsoft Corp, and Amazon.com Inc. These tech stocks were the main drivers of the S&P 500.

Thomas Hayes, chairman of Great Hill Capital, said the market movement was predicated on rates. As long as rates stay compressed, there’s a bid for long-duration earnings power embodied in the rally in tech, he added.

On Wall Street, the Dow Jones Industrial Average added 0.17% to 33,503.57. The S&P 500 climbed 0.42% to 4,097.17 and the Nasdaq Composite rose 1.03% to 13,829.31.

Pressured by Powell’s dovish comments and weaker-than-expected initial weekly jobless claims, the U.S. Treasury yields declined on Thursday.

Late on Wednesday, Benchmark 10-year notes last recorded to have risen 9/32 in price. That was to yield 1.6244%, from 1.654%.