Stocks, Dollar Rise as Bonds Slip Amid Jobs Data: Markets Wrap

(Bloomberg) -- U.S. stocks rose to fresh records, the dollar strengthened and Treasuries fell as a spike in private hiring data bolstered optimism in the economy before Friday's jobs report. Markets largely ignored the U.S. withdrawal from the Paris climate pact.

The S&P 500 Index and the Dow Jones Industrial Average closed at all-time highs. Banks rebounded from a selloff as the 10-year Treasury yield pushed higher. European equities halted a five-day slide. The dollar strengthened as companies added more workers to U.S. payrolls in May than forecast. West Texas oil erased gains in afternoon trading.

Banks led the biggest gain for U.S. stocks in almost two weeks, as a slew of data pointed to an economy of firm footing. With the Federal Reserve meeting in two weeks, eyes will turn Friday to the latest hiring report. At the same time, political intrigue in Washington remained a market theme, with former FBI Director James Comey slated to testify to lawmakers June 8, the same day as the U.K. election.

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Here are some of the key upcoming events:

• The U.S. jobs report Friday may bolster the case for a rate hike, with a gain of 180,000 positions expected.

Here are the main moves in markets:

Stocks

• The S&P 500 rose 0.8 percent to a record 2,430 at 4 p.m. in New York.
• The Nasdaq Composite and Nasdaq 100 indexes each advanced to fresh records.
• The Russell 2000 Index jumped 1.9 percent after lagging behind other major equity gauges last month. The small cap index climbed the most since March 1.
• The Stoxx Europe 600 Index advanced 0.4 percent, after finishing May with a 0.8 percent increase. Real-estate and media shares led gains Thursday.
• MSCI's emerging-market index rose 0.4 percent after climbing for a fifth straight month in May.

Currencies

• The Bloomberg Dollar Spot Index rose 0.2 percent, following a 1.5 percent decline in May for the biggest monthly drop since January. It would be the first gain of the week, bolstered by a private payrolls survey
• The pound fell 0.1 percent to $1.2883. The euro weakened 0.3 percent to $1.1216.
• The yen slipped 0.6 percent to 111.396 per dollar, after gaining in the month of May.

Commodities

• West Texas Intermediate crude oil fell 0.4 percent to $48.15 to a two-week low. Crude initially rose above $49 a barrel after government data showed a drop in inventories. Crude fell 2.7 percent in the previous session.
• Gold dropped 0.4 percent to $1,263.98 an ounce, giving back some of Wednesday's 0.5 percent gain. 
• Nickel posts lowest close since June 2016 as contraction in private gauge of China's manufacturing compounds concerns about oversupply following a resumption in nickel ore exports from Indonesia.

Bonds

• The yield on 10-year Treasuries rose one basis point to 2.21 percent.
• The yield curve initially flattened after the ADP report, with the spread between five-year and 30-year notes breaching 110 basis points for the first time since May 11, before it steepened again.
• Illinois had its bond rating downgraded to one step above junk by S&P Global Ratings, the lowest grade that it's given to a U.S. state on record, as a long-running political stalemate over a budget shows no signs of ending.

--With assistance from Grant Smith Samuel Potter Edward Bolingbroke and Alexandria Arnold

To contact the reporter on this story: Jeremy Herron in New York at jherron8@bloomberg.net.

To contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Robert Brand