All three major US indexes recorded a surge above 1% at their highest in 14 months, as investors cheered economic data that fueled bets that the US Federal Reserve is nearing the end of its aggressive interest-rate hike trend.
The Federal Reserve finally announced to hold the Fed Funds Rate at 5% – 5.25% but at the same time also gave hawkish signals that the benchmark rate could still rise another 50bps (or two more times) until the end of the year, towards a range of 5.5% – 5.75%.
US stocks ended mixed on Wednesday (14/06/23) after the Federal Reserve kept the Fed Fund Rate unchanged at 5%- 5.25% but gave a hawkish signals that the benchmark rate will likely rise by another 50 bps (or two more times) until the end of the year, towards a range of 5.5% – 5.75%.
US Inflation data (May) slipped to the lowest level in a year, boosting bets that the Federal Reserve will not raise interest rates later tonight (around 1 AM GMT on Thursday). The US Labor Department report showed the consumer price index (CPI) rose 0.1% mom in May, compared to 0.4% in April (an 11-month consecutive decline); while Core Inflation unchanged at 0.4% mom.
The S&P 500 and Nasdaq reached their highest closes in 52 weeks on Tuesday (13/06/23) after US Inflation data (May) slipped to the lowest level in a year, boosting bets that the Federal Reserve will not raise interest rates later tonight (around 1 AM GMT on Thursday).
Most market participants’ thoughts lately are hoping to see US Inflation figures (May) ease again despite Core Inflation likely remain unchanged. Traders see a 76% chance of the central bank holding rates at the 5%-5.25% range, pricing in a 71% chance of a rate hike in July, according to the CME Group Fedwatch tool.
The S&P 500 and Nasdaq rallied to their highest closing levels since April 2022 on Monday trading (12/06/23), supported mainly by Technology stocks, ahead of the US inflation data release and the Federal Reserve’s decision on interest rates at their meeting this week.
The US, which is entering a quiet period ahead of the FOMC Meeting that will begin tomorrow, June 13, managed to stay in positive territory on a weekly basis with the S&P500 rising 0.38%, extending its upside week for the fourth time and the longest since July-August 2022.
Positive sentiment was evenly spread across regional markets, with US stocks registering yearto-date highs (mainly thanks to the help of Tech sector giants); fueled by bets the Federal Reserve will finally put the brakes on interest rate hikes.
