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Big Tech-Long Bond Trade Reasserts Itself on Fed: Markets Wrap

  • Dollar strengthens, commodities stumble for fifth session
  • Fed projected faster-than-anticipated pace of tightening
Bloomberg business news
WATCH: Westpac’s Sean Callow discusses Fed policy and its implications for the dollar and other currencies.(Source: Bloomberg)
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The reflation trade that has ruled markets for most of 2021 was in retreat Thursday, replaced by a stodgier group of winners that included giant cash-spewing technology companies and longer-dated bonds. The reordering, including a fifth day of losses in commodities, came after Federal Reserve officials signaled they’re preparing to slow stimulus.

Apple, Nvidia and Microsoft helped push the tech-heavy Nasdaq 100 to a record high as investors rotated from cyclical stocks. The benchmark S&P 500 Index finished slightly in the red, while the Dow Jones Industrial Average slumped. Yields on longer-maturity Treasuries tumbled amid speculation investors were unwinding curve steeping trades. The Bloomberg Dollar Spot Index also rose for a fifth day, the longest winning streak since March 2020, making commodities that are priced in the currency more expensive.