Editor
Wall Street’s major indicators edge higher despite increasing inflation, interest rate cuts, and uncertainties.
The market’s hopes for early interest rate reductions rose this morning after Goldman’s expert reports on the subjects. Recognized Goldman Sachs experts say that the second half of this year will at least witness three interest rate cuts: in June, September, or December. While this forecast remains just a market prediction, the probabilities are high. Goldman Sachs economists said in a Wednesday note, “We continue to expect cuts in June, September, and December, for a total of 3 cuts in 2024.”
Meanwhile, Wall Street major indices closed at a new record high, just as Fed Chair Jerome Powell highlighted U.S. economic resilience and expected a “soft landing.”.
Previously, the Fed maintained its interest rate projection to a benchmark rate of 4.6% next year and suggested three rate cuts in 2024. By doing that, they will keep the interest rates consistent with the December rate. Additionally, the U.S. Federal Reserve’s monetary officials believe that their efforts to tame inflation are succeeding. However, marketers see the difference. Additionally, the last CPI and PPI reports signaled troubling increases in inflation, which could affect the market in the long term.
Meanwhile, Wall Street Main Indexes edged higher, setting the path for a record-high week. The S&P 500 benchmark was up by 0.37% to 5.234.80 basis points. The tech-heavy Nasdaq gained this week, unlike last week when the index fell due to the rise of interest rates and rising inflation. The tech sector was up by 0.16% to 16,398.40 basis points.
The Dow Jones Industrials Index gained 0.77% to close at 93.817.60 basis points. Additionally, the dollar gained 0.61% to 103.34.
Moving to the bond market, in the previous session, the 2-year Treasury yield declined to 4.62%. The high decline in yields was due to the unchanged rate path for 2024, which led to a significant drop in Treasury yields. Philip Colmar, global macro strategist at MRB Partners, suggests that as long as bond yields stabilize, the equity market has room to rise, with broader participation already evident in the rally.
Data published today shows that 10-year Treasury yields rose by 0.30%, while fixed 30-year mortgage bonds were down by 0.2%.
In the energy sector news, oil and natural gas prices declined as a result of the U.S.’s announcement of a fall in its gas and oil inventories. The West Texas intermediate was down by 0.41% to $80.6 per barrel, while the Bernt crude oil declined by 0.36% to $85.86 per barrel.
Natural gas prices slumped by 0.82% to 1.86 per gallon.
Moving to the individual stocks news, for the first time since the pandemic, Darden Restaurants is making its first decline. The company’s stocks dropped by more than 5% due to revenue misses and shrinking same-store sales.
FedEx (NYSE: FDX) and Nike (NYSE: NKE) are anticipated to report earnings after market close.
Micron Technology (NASDAQ: MU) stock surged 17% to a record high following a surprise profit announcement and strong revenue forecast driven by high demand for AI computing memory chips.
