The utilities sector was the top performer
U.S. stock-market indexes closed mostly higher on Tuesday, 12 June 2018 as investors shifted their attention away from a landmark meeting between President Donald Trump and Kim Jong Un to the start of a series of important central-bank meetings, kicking off with the Federal Reserve.
The Dow Jones Industrial Average switched between small gains and losses, but failed to snag a fifth straight day of gains after closing fractionally lower at 25,320.73. The S&P 500 advanced 4.85 points, or 0.2%, to 2,786.85. Meanwhile, the Nasdaq Composite Index added 43.87 points, or 0.6%, to 7,703.79.
The utilities sector was the top performer, bouncing back from a disappointing start to the month, followed by the top-weighted technology sector. Within the tech space, Twitter soared 5.0%, hitting a three-year high, after JPMorgan raised its target price to $50 from $39.
On the downside, the energy sector settled at the bottom of the sector standings, even though crude prices ticked higher. WTI crude futures advanced 0.4% to $66.36 per barrel on Tu
Beyond geopolitics, traders were focusing on central-bank meetings this week. The Fed, led by Chairman Jerome Powell, is expected to raise interest rates on Wednesday. The U.S. central bank's two-day meeting began Tuesday. European Central Bank policy makers are expected to announce the timing for unwinding its bond buying when they meet Thursday.
On Tuesday, the ICE U.S. Dollar Index, a measure of the dollar against a half-dozen major currencies, was up 0.3%. It has climbed by roughly 4% so far this quarter, helping to put pressure on dollar-denominated commodity prices, which have lost roughly 2% for the quarter.
As for Tuesday's economic data, government data showed that the consumer-price index has risen 2.8% in the past 12 months, up from 2.5% in April. That's the highest level since early 2012. The yearly increase in the core rate edged up to 2.2%. Inflation can be a mixed bag for gold; it can put pressure on central banks to hike rates, hurting nonyielding bullion, but gold has historically maintained a role as an inflation hedge for long-term investors.
Crude oil prices saw mixed trading on Tuesday, 12 June 2018 with U.S. prices finishing modestly higher for a second straight session, but global benchmark Brent crude ending lower. U.S. prices got a boost ahead of data that are expected to show a weekly fall in domestic crude inventories, while Brent crude declined after a monthly report from the Organization of the Petroleum Exporting Countries revealed higher production from the cartel, led by swing producer Saudi Arabia.
U.S. benchmark July West Texas Intermediate crude rose 26 cents, or 0.4%, to settle at $66.36 a barrel on the New York Mercantile Exchange. August Brent crude, the global benchmark, lost 58 cents, or 0.8%, to $75.88 a barrel on ICE Futures Europe.
OPEC oil production reportedly increased by 35,000 barrels a day in May, month-on-month, to average 31.87 million barrels a day. Output in Saudi Arabia jumped by 85,500 barrels a day but was partly offset by production outages in Nigeria, Venezuela and Libya. Saudi Arabia's own data for May showed it increased its own output by 161,400 barrels a day.
Bullion prices fell at Comex on Tuesday, 12 June 2018. Gold prices fell below $1,300 an ounce on Tuesday, as an agreement between the U.S. and North Korea aimed at denuclearizing the Korean Peninsula muted demand for the haven metal, ahead of an expected interest-rate hike by the Federal Reserve.
August gold fell $3.80, or 0.2%, to settle at $1,299.40 an ounce, after tapping a high near $1,305 during the session. U.S. stocks were mixed, but largely held their ground in the wake of the geopolitical headlines.
Elsewhere, U.S. Treasuries finished mixed, with shorter-dated issues showing relative weakness. The yield on the 2-yr Treasury note climbed three basis points to 2.55%, while the yield on the benchmark 10-yr Treasury note finished flat at 2.96%. The 10-yr yield touched 2.98% in early-morning trading before falling back.
On Wednesday, the Fed's latest policy directive will cross the wires at 2:00 PM ET, and the market is all but certain that it will include the second rate hike of 2018. The Fed will also release updated economic and interest-rate projections. Separately, the Producer Price Index for May will be released at 8:30 AM ET.
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