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20/06/24
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Wall Street Pushed Higher by Rate Cut Hopes, AI
On Thursday, stocks on Wall Street followed their European counterparts up as central bank actions abroad and soft economic data set the tone for a dovish pivot by the Federal Reserve.
The AI rally is still leading the charge, with chipmaker Nvidia gaining 2.5%. The three main U.S. stock indexes were all in positive territory.
Lower-than-anticipated economic reports, including disappointing building permits and housing starts data, together with a jobless claims report that indicated a gradual easing in the labor market, seemed to make the case that the Fed’s policy is having the desired effect.
This, together with the Swiss National Bank’s interest rate cut and dovish sentiment expressed by the Bank of England, appeared to give the Fed some leeway over the timing of the first interest rate cut.
Expectations for a rate cut in Sept. have faded slightly. According to CME’s FedWatch tool, financial markets are pricing in a 57.9% probability of a 0.25% rate cut in Sept., down from 61.1% the prior week.
The Nasdaq Composite added 13.88 points, or 0.08%, to 17,876.12, the S&P 500 gained 21.86 points, or 0.40%, to 5,495.09 and the Dow Jones Industrial Average rose 84.8 points, or 0.22%, to 38,919.66.
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