Key Points:
- The U.S. stock index rose slightly in Monday evening trading. Investors are focused on Jerome Powell’s upcoming address and key economic data.
- Wall Street ended Monday positively. The S&P 500 index had gained 0.27%, the Nasdaq 100 rose 0.66%, and the Dow Jones gained 0.13%.
- Powell’s speech and the Fed’s meeting minutes are expected to provide more clues on interest rate policies, and Friday will give further insights.
- Traders are increasingly betting on a 25-basis-point rate cut in September.
U.S. stock index futures edged lower in Monday evening trading as investors focused on an upcoming speech by Federal Reserve Chair Jerome Powell for insights on future interest rate movements. Anticipating key payroll data and releasing the Fed’s June meeting minutes also weighed on sentiment, with trading volumes remaining light ahead of the July 4 holiday.
Despite cautious trading on Monday evening, Wall Street ended the day on a positive note, driven mainly by technological stock gains. The S&P 500 index gained 14.61 or 0.27% to 5475.10, the Nasdaq 100 rose 129.35 or 0.66% to 19812.22, and the Dow Jones index gained 50.66 or 0.13% to 39169.52. This performance should reassure investors and traders about the market’s resilience.
Jerome Powell is scheduled to speak at a European Central Bank conference on Tuesday, where he may address recent economic data indicating some cooling in the U.S. economy and inflation. The Fed’s meeting minutes, set to be released on Wednesday, follow a forecast from the central bank suggesting it will cut interest rates only once in 2024. Several Fed officials have warned that persistent inflation could delay plans to loosen monetary policy.
Nonfarm payroll data, expected on Friday, will provide further insights into the labor market’s performance. Despite high inflation and interest rates, the labor market has remained strong, a critical factor for the Fed in considering rate cuts.
Despite the Fed’s hawkish signals, traders have increased their bets on a 25-basis-point rate cut in September. According to the CME FedWatch Tool, such a cut is a 59% chance. These heightened expectations have kept investors optimistic about the stock market, helping Wall Street rise despite signs of a cooling U.S. economy. Technology stocks continued to provide the biggest boost to the indices, supported by ongoing optimism that artificial intelligence will drive demand in the sector.
