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Financial shares led US stocks higher on Thursday as Treasuries fell and the dollar climbed, with Wall Street shifting back into risk-on mode.
The S&P 500 financials sector zipped 1.2 per cent higher, and industrial stocks gained 0.5 per cent. The benchmark itself was up 0.3 per cent.
The move into risk assets following the US election last November has cooled this month, with doubt building over the Trump administration’s ability to pass pro-growth measures. But the reflation trade showed signs of life on Thursday.
In another bright spot for risk assets, the tech-heavy Nasdaq Composite climbed 0.3 per cent to set a fresh closing high.
Havens came under pressure on Thursday. The US 10-year Treasury yield, which moves in the opposite direction of the price, rose 3.1 basis points to 2.418 per cent. Gold was off 0.7 per cent to $1,244 a troy ounce.
Investors have focused on recent commentary from top Federal Reserve officials suggesting that the central bank remains optimistic about the economy regardless of fiscal policy. Most have suggested the Fed should raise rates at least two more times this year, with some pointing to an even more aggressive policy tightening.
Corporate earnings season is also now on the horizon, with JPMorgan Chase, the biggest US lender by assets, set to reveal its quarterly results in exactly two weeks. S&P 500 earnings are expected to have risen 10 per cent year-on-year in the first quarter, according to FactSet. That would represent a sharp uptick from the 4.9 per cent growth clocked in the final three months of 2016.