Energy and finance companies posted gains in the S&P 500, driving the index 0.25% higher on Friday. Meanwhile, tech stocks showed less dynamics, which allowed dollar to grow.
Another blow to investor sentiment was China's declaration that cryptocurrency-related transactions will be considered illegal in the country. This shows the government's seriousness in tightening control over sectors from private education to digital games, e-cigarettes, property and insurance.
"News out of China definitely impacts markets because it can shake market sentiment, but the actual effect of another Chinese ban has minimal impact on underlying market structure at this point," said Clara Medalie, head of research at Kaiko.
Earlier, US stocks suffered their worst weekly outflow in more than three years as investors turned to more defensive assets amid the China Evergrande Group's debt crisis and the potential tapering by the Federal Reserve. Traders pulled $ 28.6 billion from US equity funds on September 22, said Bank of America Corp, with reference to EPFR Global data.
And according to two regional Fed chiefs, the US economy has met the central bank's conditions to start cutting bond purchases earlier than scheduled. Cleveland Fed President Loretta Mester said she supports dialing back bond purchases starting November and concluding them in the first half of 2022. Separately, Kansas City Fed President Esther George stated that "the criteria for substantial further progress have been met," referring to the central bank's test.
Other important events to watch out for are:
- speech of ECB President Christine Lagarde;
- data on orders for durable goods;
- speech by Bank of England chief Andrew Bailey.
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