Stocks trying to recover from yesterday's decline

05/05/2021

Wednesday started a bit more positive than Tuesday, and EU bourses were nearly 1% higher, while US indices were up by 0.3%.

Yesterday, sentiment worsened notably, and the tech-heavy Nasdaq 100 index suffered a 2% decline after Yellen's hawkish comments. 

"It may be that interest rates will have to rise somewhat to make sure that our economy doesn't overheat, even though the additional spending is relatively small relative to the size of the economy," Yellen said at a virtual event Tuesday.

Her comments contradict the Fed's current outlook as the central bank said many times it won't raise rates anytime soon.

Later in the day, the US ADP employment report is expected to soar to 800,000, from 517,000 in March as the US economy is slowly opening up. 

Moreover, the services ISM is due and should improve to 64.3 from 63.7.

Elsewhere, the EURUSD pair dropped below 1.20, with the next leg lower, possibly targeting the strong support of 1.1950.
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