The major Wall Street indices closed the week (5-9 April) on new highs amid rising optimism over US reopening and economic recovery as recent jitters over rising bond yields took a back seat.

The Dow ended the week 2% higher at a record closing 33,800; the S&P 500 rose by 2.7% to 4,128 after chalking a third straight record close on Friday for its best week since early February; while the Nasdaq Composite advanced 3.1% to 13,900 as the Big Tech stocks rallied – Apple by more than 8% and both Amazon and Alphabet gaining more than 6%.

Both techs and stocks linked to the recovering economy led gains amid accelerating US vaccine rollouts even as the producer price index (PPI) rose by 1.0% in March which was above expectations of a 0.4% rise. Year-on-year, the PPI was up 4.2%, the biggest annual jump in more than nine years.

While 10-year Treasury yields ticked slightly higher to 1.66% following the PPI data, yields had already retreated earlier in the week from recent highs at 1.77% after the US Fed chairman, Jerome Powell noted on Thursday that US recovery from the pandemic remained “uneven,” signaling that it will need a more robust recovery before the central bank consider any rates hikes.

Minutes from the central bank’s March FOMC policy meeting released last Wednesday also showed that policymakers were not overly concerned over any sustained rebound in inflation and remained committed to keeping an accommodative stance until employment fully recovers from the pandemic fallout.

For now, investors seem to be looking past recent inflation concerns as long as economic growth remains robust and the Fed keeps its dovish stance on funds rates, especially after an uptick in new US jobless claims for the second week in a row. The Fed has said on numerous occasions it would stay its dovish course until the unemployment numbers are more stable.

Meanwhile, credit card data from the Bank of America showed a 67% year-on-year rise in spending for the week ended April 3, fueled by Covid stimulus cheques and re-openings. The bank estimates that Americans have some $3.5 trillion in bank accounts from the Biden stimulus cheques and savings which should start flowing into the reopening economy. Economists now expect US second-quarter growth to expand by 10% with growth for 2021 exceeding 6.5% and that of the pre-pandemic era extending to 2023.

The possibility that jobless claims will reverse course and decline this week will likely keep risk-on sentiments intact as the earnings reporting season – starting with banks – gets underway this week, which will give a clearer indication of profits this year.

According to FactSet Research, overall earnings for the S&P 500 should improve by 24.5% from the pandemic-hit second quarter a year ago, with financial sector earnings expected to rise by nearly 80% on-year.

The same level of market optimism on Wall Street may not be as strong in Asia due to vaccine shortages and resurgent virus cases in countries like Japan, India, Thailand and the Philippines.

Some investors are already shying away from big moves in Chinese stocks which has seen the CSI 300 Index backtracked by more than 13% from its recent 13-year high in February. The fact that Chinese regulators have slapped a record anti-trust fine of 18 billion yuan (US$2.75 billion) on the Alibaba Group – which is about 4% of its 2019 revenues – may also cast a further pall over other Chinese tech and e-commerce companies.

That’s on top of worries over tightening of liquidity by the Chinese authorities and a potential slowing down or pullback in supportive state policies, especially after the March PPI for China hit a 2-year high, which may hurt the nation’s exporters.