Wall Street’s benchmark S&P 500 index hit a 13-month high on Friday as Tesla’s tie-up with General Motors boosted shares in the electric-car maker.
The S&P added 0.6 per cent at the opening bell, passing its closing high of 4,305.2 on August 16 of last year, and hitting its highest level since late April last year. The tech-heavy Nasdaq Composite gained 0.9 per cent, with shares in Tesla adding 6.5 per cent.
Tesla boosted investors’ sentiment as the carmaker locked in a deal letting the customers of General Motors use its electric-vehicle charging system, having struck a similar agreement with Ford last month.
European equities pared some of their early losses, but the region-wide Stoxx 600 and Germany’s Dax both remained down 0.1 per cent.
London’s FTSE 100 fell 0.5 per cent, dragged lower after a profit warning from Croda. Shares in the chemicals company lost 12 per cent, hitting a low last seen in early 2020, after it warned that customers were reducing their inventories. The Stoxx 600 Chemicals index lost 2 per cent.
European gas futures soared by a fifth to €32.30 ahead of an expected heatwave in parts of Europe over the weekend.
Meanwhile, investors prepared for the Federal Reserve’s policymakers to set interest rates next week, betting they will refrain from raising rates this month.
Traders thought a rate increase was less likely after US unemployment data on Thursday pointed to a cooling labour market.
“Markets jostled with weekly US jobs data that showed unemployment on the rise, giving the Fed more reason to consider a pause in rate hikes when it meets next week,” said Matt Britzman, equity analyst at Hargreaves Lansdown. “And the big benefactors? Big Tech of course.”
As an indication of the calm spreading across markets, the Vix volatility index fell to its lowest level since the onset of the panic over the coronavirus pandemic three years ago. The benchmark is a measure of expected swings in the S&P over the coming month.
Yet the yield on the two-year US Treasury note, which is sensitive to rate expectations, rose 0.08 percentage points to 4.59 per cent. The yield on the 10-year note was up 0.05 percentage points at 3.77 per cent. Bond yields rise as prices fall.
Investors prepared for European Central Bank policymakers to meet next week, betting that they will raise the bank’s deposit rate by 0.25 percentage points, above its current level of 3.25 per cent.
“Despite some recent respite in inflation prints, [ECB president Christine Lagarde] will indicate that their job on inflation is far from being done,” said Mohit Kumar, chief European economist at Jefferies.
In Turkey, the lira extended its fall to record lows, down 1.4 per cent to 23.54 against the dollar, after President Recep Tayyip Erdoğan appointed former US banker Hafize Gaye Erkan to lead the country’s central bank.
Asian equities rallied, with Hong Kong’s Hang Seng index gaining 0.5 per cent, while China’s CSI 300 advanced 0.4 per cent.
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