Bonds & Stocks
Wall Street traders sent stocks higher after a slide that gripped the market in the final minutes of Tuesday’s trading, with investors rebalancing their portfolios after a rally that’s already topped $4 trillion this year. Every quarter- and month-end, pension funds and other institutional investors check their exposures to make sure they meet strict allocation limits between equities and bonds, as well as between domestic and international stocks. With stocks set to cap another strong quarter, pension funds are likely to sell an estimated $32 billion in equities to rebalance their positions, according to Goldman Sachs Group Inc. That would be the biggest adjustment since June 2023. The S&P 500 rose to around 5,235. Treasury 10-year yields declined one basis point to 4.22%. The dollar wavered.
Economy
The bridge collapse Tuesday that shut the Port of Baltimore and closed a major highway will cause weeks or months of transportation disruptions in the Mid-Atlantic region and accelerate a shift of cargo to the US West Coast as importers and exporters try to avoid potential bottlenecks at trade gateways from Boston to Miami. Companies and consumers may face a repeat of one of the big supply chain lessons of the Covid pandemic: that a sudden 10% or 20% increase in volumes through a port “is enough to cause massive backlogs, congestion, ships waiting offshore and all sorts of delays that can compound on themselves.”
World
Japan had its toughest warning yet for traders on its willingness to intervene in currency markets after the yen slid to its weakest level in about 34 years against the dollar. The nation’s currency dipped to 151.97 versus the greenback early on Wednesday in Tokyo — beyond the level at which policymakers stepped in during October 2022 — before comments from government officials on their readiness to act boosted the yen to its strongest level of the day.