Stocks inch up, bond yields dip; inflation data ahead

By Caroline Valetkevitch

NEW YORK (Reuters) -Global stock indexes edged higher on Thursday, while U.S. Treasury yields declined slightly after a series of U.S. economic reports suggested ebbing momentum.

Traders were eager to see Friday's U.S. personal consumption expenditures (PCE) data, which is the Federal Reserve's preferred inflation measure and could help investors determine the U.S. interest rate outlook.

Thursday's data mostly supported the view the Fed could soon begin cutting interest rates. It included a report showing first-time applications for U.S. unemployment benefits drifted lower last week, but the number of people on jobless rolls jumped to a 2-1/2-year high in mid-June.

"The bond market is taking some of the weaker economic data to heart," said Paul Nolte, senior wealth advisor and market strategist for Murphy & Sylvest in Elmhurst, Illinois.

Investors were also gearing up for the U.S. presidential debate, he added.

U.S. President Joe Biden and former President Donald Trump head to the first of two debates ahead of their election rematch this November. The debate will air at 9 p.m. ET (0100 GMT on Friday) on CNN.

The Japanese yen edged up from a 38-year low against the U.S. dollar on Thursday, helped by the softening U.S. economic data.

But investors remained on high alert for any signs of Japanese intervention to prop up the currency.

Japan's finance minister has said he would take any necessary action on currencies, and that Japanese authorities were "deeply concerned" about the effect of the yen's drop on the economy.

The Japanese yen strengthened 0.03% against the greenback at 160.77 per dollar.

The dollar index, which measures the greenback against a basket of currencies, fell 0.12% at 105.92, with the euro up 0.22% at $1.0702.

All three of Wall Street's major stock indexes ended slightly higher.

The Dow Jones Industrial Average rose 36.26 points, or 0.09%, to 39,164.06, the S&P 500 gained 4.97 points, or 0.09%, to 5,482.87 and the Nasdaq Composite was up 53.53 points, or 0.30%, to 17,858.68.

Among the day's decliners, however, was Micron Technology, whose shares fell 7.1% after a disappointing revenue forecast late on Wednesday. An index of semiconductors ended down 0.6%.

MSCI's gauge of stocks across the globe rose 0.02 points to 803.75. The STOXX 600 index fell 0.43%.

France, Italy and Spain will also release inflation data on Friday.

Investors have become more worried about inflation following a surprise jump in inflation data in Australia on Wednesday and in Canada on Tuesday.

Also, the first round of French parliamentary elections will take place on Sunday.

In U.S. Treasuries, the yield on benchmark U.S. 10-year notes fell 3 basis points to 4.286%, from 4.316% late on Wednesday.

Brent crude oil futures rose $1.14, or 1.34%, to settle at $86.39 a barrel. U.S. West Texas Intermediate crude futures gained 84 cents, or 1.04%, to settle at $81.74.

(Reporting by Caroline Valetkevitch; Additional reporting by Elizabeth Howcroft in London; Editing by Mark Potter, Josie Kao and Jamie Freed)