US STOCKS-Wall St gains ahead of Fed officials’ remarks; Dow nears 40,000 mark | Technology
On a notable Friday, U.S. stock markets witnessed a rise as investors positioned themselves ahead of remarks from Federal Reserve officials, seeking insights into future U.S. monetary policy directions. This anticipation came in the wake of economic data released throughout the week that fueled speculations around possible interest rate cuts.
The indices of Wall Street showcased an upward trajectory, approaching record highs. This movement came on the heels of a last-month selloff, tempered by various economic indicators hinting at a relaxed U.S. labor market scenario. Such trends have fostered a growing sentiment within the market that the Federal Reserve might implement multiple reductions in borrowing costs throughout the year.
Benefiting from an earnings season that outstripped expectations significantly, both the S&P 500 and the Nasdaq Composite were set on the path for their third consecutive week of gains. Concurrently, the Dow Jones Industrial Average marked its eighth successive session in green, embarking on its longest streak of daily gains since December. This consistency poised the blue-chip index on the verge of breaching the 40,000 mark for the first time.
“This is the classic point of bad news is good news because the employment data over the last two weeks has been what the Fed has finally been looking for,” explained Hugh Anderson, managing director at HighTower Advisors. “Of course, it isn’t good for the job seeker, but it creates an optimistic environment for the market because now they’re looking for their interest rate cuts.”
Current market dynamics suggest a forecast of 45 basis points worth of rate cuts by the end of 2024, with speculators eyeing the initial reduction of 25 basis points potentially coming as early as September. Even though the chorus of Fed policymakers has echoed that a rate cut would be the subsequent move, the timing of such an adjustment continues to be a subject of speculation.
The climate of uncertainty was further accentuated by remarks from San Francisco Fed President Mary Daly, who highlighted the “considerable” uncertainties surrounding the future trajectory of U.S. inflation. Market participants are now keyed in on awaiting insights from multiple Federal Reserve policymakers, including Minneapolis President Neel Kashkari, Dallas President Lorie Logan, and Vice Chair for Supervision Michael Barr, for further clarity on the anticipated interest rate path.
Today, the market’s eye is also on the University of Michigan’s preliminary consumer sentiment survey for May, expected to provide additional signals on the economy’s direction. Leading the sectoral gains, the Information Technology sector recorded a 1% advance.
In the early trading hours, the Dow Jones Industrial Average saw a rise of 165.26 points to 39,553.02, marking a 0.42% increase. Similarly, the S&P 500 added 20.84 points, reaching 5,234.92, while the Nasdaq Composite climbed by 67.49 points to 16,413.76.
Significant market movements included Nvidia, which witnessed a 2% increase following a report from Taiwan Semiconductor Manufacturing Co, its major supplier, announcing a nearly 60% jump in April sales. On the other hand, Novavax’s shares surged after alleviating concerns over its operational viability and securing a lucrative licensing deal with Sanofi for COVID-19 vaccines. SoundHound AI also enjoyed a spike after exceeding first-quarter revenue expectations.
In the landscape of market dynamics, advancing issues clearly outnumbered decliners across both the NYSE and Nasdaq, marking a promising outlook for investors keen on deciphering the complex interplay of economic indicators and Federal Reserve policies in shaping future market trends.
