Stocks, Oil and Bond Yields All Climb as Economic Data Improves

But data also showed that manufacturers are struggling to meet rising demand, which could add to inflationary pressures.


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Stocks, oil and bond yields all climb as economic data improves.

June 1, 2021, 7:59 a.m. ET

June 1, 2021, 7:59 a.m. ET

Stocks, commodities and bond yields all rose on Tuesday amid evidence of a strengthening global economic recovery. In the data, there are also signs that manufacturers are struggling to keep up with demand, which could increase inflationary pressures.

The S&P 500 climbed 0.4 percent in early trading, inching closer to a record. The yield on 10-year Treasury notes rose to 1.62 percent, the highest level in more than a week.

Most European stock indexes were higher. The Stoxx Europe 600 index climbed 1.2 percent, extending its run into record territory. All sectors were higher with energy and mining stocks among the biggest gainers.

Measures of manufacturing activity in the both the United States and eurozone climbed in May to a record highs, according to IHS Markit.

The increase in manufacturing output is another sign that the eurozone economy is rebounding strongly in the second quarter, Chris Williamson, an economist at IHS Markit said.

“However, May also saw record supply delays, which are constraining output growth and leaving firms unable to meet demand to a degree not previously witnessed,” he added.

In Europe, the annual rate of inflation in the euro area rose to 2 percent in May, according to the first estimate by the European Union’s statistics agency, reaching the European Central Bank’s target for the first time since November 2018

Optimism was bolstered by rosier forecasts for economic growth released Monday by the Organization for Economic Cooperation and Development. The group predicted the global economy would expand by 5.8 percent in 2021, up from a 4.2 percent projection in December. It said the spread of vaccines and strong fiscal stimulus in the United States were helping improve the economy, but it raised concerns about variants of the virus.

In China, the manufacturing sector reported the strongest increase in new work for five months in May though there are also reports of supply delays and higher purchasing costs.

Oil prices climbed as the Organization of the Petroleum Exporting Countries and its allied producers including Russia met. Analysts expect the oil producers to continue gradually increasing production quotas. West Texas Intermediate, the U.S. crude benchmark, rose 3.5 percent to above $68 a barrel.

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