World stocks, US yields gain after French election results

NEW YORK – Global stocks edged higher in choppy trading on Monday, while US Treasury yields rose following France’s historic elections and ahead of a string of economic data this week that could provide clues on the likelihood of a Federal Reserve interest rate cut.

The French far-right took a smaller-than-expected lead in the first round of voting, suggesting a hung parliament could result and hamper the party’s agenda. European stocks finished up 0.31%, while the euro rose 0.13% following the vote.

Investors will be eyeing remarks from Fed Chair Jerome Powell on Tuesday, followed by minutes from the Fed’s latest policy meeting on Wednesday and US non-farm payrolls data due on Friday. The Fed in June projected just one rate cut in 2024.

“The French elections result wasn’t as bad (as expected) and sometimes positioning matters,” said Wasif Latif, president and chief investment officer at Sarmaya Partners.

“There’s going to be a big week for payrolls even though they’re shortened trading so liquidity might be a little bit low as we head into the weekend,” Latif added.

The MSCI world equity index, which tracks shares in nearly 50 countries, was up 0.26% after early paring losses. In Asia, the MSCI’s broadest index of Asia-Pacific shares outside Japan ended flat.

Benchmark 10-year Treasury yields rose to their highest since mid-June at the start of a holiday-shortened week that will likely be marked by low trading volumes. The yield on the note rose to 4.4692%.

CHOPPY SESSION

On Wall Street, all three major indexes finished higher in a choppy session led by gains in technology, consumer discretionary, and financial stocks. Materials, industrials, and real estate equities were the biggest losers.

The Dow Jones Industrial Average rose 0.13% to 39,169.52, the S&P 500 gained 0.27% to 5,475.09 and the Nasdaq Composite gained 0.83% to 17,879.30.

Oil prices rose 2% to a two-month high on hopes of rising demand during the Northern Hemisphere’s summer driving season and worries that conflict in the Middle East could spread and reduce global oil supplies.

Brent futures rose 1.9% to settle at USD 86.60 per barrel, while US West Texas Intermediate (WTI) crude rose 2.3% to settle at USD 83.38. That was the highest close for Brent since April 30 for the third day in a row and the highest for WTI since April 26.

In currencies, the dollar surged to a fresh 38-year peak against the yen, the greenback soared to 161.72 yen, its strongest level since 1986.

The dollar index was up 0.1% at 105.82. It was initially lower after data from the Institute for Supply Management on Monday showed US manufacturing contracted for a third straight month in June.

Gold prices edged higher. Spot gold added 0.28% to USD 2,332.29 an ounce, while US gold futures gained 0.09% to USD 2,329.70 an ounce.

(Reporting by Chibuike Oguh in New York; Additional reporting by Lawrence White in London; Editing by David Holmes and Aurora Ellis)