U.S. stocks rebounded in a volatile session on Friday, while the dollar cut losses and bond yields rose to session highs, as reports emerged that President Donald Trump had fired his controversial chief strategist, Steve Bannon.
“There’s a lot of hopeful people thinking that, you know what, he has been a divisive figure in the White House,” said Peter Costa, President of Empire Executions. “Getting rid of him might be a good deal for the president.”
Gold turned negative after the reports, which seemed to turn investor focus away from uncertainty over Trump policy and nerves over terrorist attacks in Spain.
Trump has alienated Republican colleagues, corporate leaders and overseas allies this week with several controversial comments after violence related to a white nationalist protest in Virginia last weekend.
His criticism of removals of Confederate monuments sent shivers through markets as investors bet that the stance would hurt Trump’s ability to build enough consensus to deliver growth boosts such as tax reform and stimulus spending.
“It appears they’ve gotten so bogged down in the politics of Confederate monuments, everybody thinks they’re incapable of delivering meaningful change,” said Bruce McCain, chief investment strategist at Key Private Bank in Cleveland.
Months of relatively low volatility did not help.
“We’ve been overly complacent for an extended period of time, and the normal anxieties in the market are beginning to reawaken,” said McCain.
The Dow Jones Industrial Average rose 20.73 points, or 0.1 percent, to 21,771.46, the S&P 500 gained 7.13 points, or 0.29 percent, to 2,437.14 and the Nasdaq Composite added 26.79 points, or 0.43 percent, to 6,248.70.
U.S. consumer sentiment rebounded in early August from an eight-month low in July, reflecting confidence in the economic outlook and personal finances.
The dollar index fell 0.13 percent, with the euro up 0.25 percent to $1.1752.
The Japanese yen strengthened 0.10 percent versus the greenback at 109.48 per dollar. The dollar had hit its lowest point in a week against the yen earlier in the session.
Benchmark 10-year notes last fell 3/32 in price to yield 2.2062 percent, from 2.197 percent late on Thursday.
Spot gold dropped 0.1 percent to $1,285.97 an ounce to the highest since last November and on track for its second week of gains.
Oil prices rose as the stock market strengthened and the U.S. dollar weakened, though investors remained worried about the global oil glut.
U.S. crude rose 2.8 percent to $48.41 per barrel, and Brent was last at $52.59, up 3.06 percent on the day.
The pan-European FTSEurofirst 300 index lost 0.73 percent and MSCI’s gauge of stocks across the globe shed 0.08 percent. Investors had reacted a terrorist attack in Barcelona by selling shares in airlines. Madrid shares fell 0.8 percent.