The jump in shares was in step with buoyant global stocks as investors put on the back burner concerns that rising prices could lead the US Federal Reserve to raise interest rates sooner than expected and reduce the gush of cash that has propelled financial markets.
“I don’t see us off to the races,” said Tim Ghriskey, chief investment strategist at Inverness Counsel, which manages about US$4 billion in assets. He said inflation risks are “real” and financial markets will likely be choppy for some time. Still, mega-cap growth stocks, which have been beaten down this week on concerns over their lofty valuations, surged, with shares in Apple Inc, Amazon.com Inc and Microsoft Corp ending up at least 1.9 per cent each and Tesla Inc leaping 3.2 per cent.
The drop in yields flattened the yield curve, an indicator of economic growth expectations, by a touch. The spread between two — and 10-year Treasury yields, which had widened earlier this week when investors were focused on inflation, narrowed to 148.3 basis points.