The US stock market lost a few points in its main indices awaiting more information on when and how much rates will be cut and in “wait and see” mode regarding Nvidia’s balance sheet.
It should be noted that Powell did not indicate when or by how much interest rates might be cut.
Reuters
He market August began under pressure as concerns about a possible recession and the liquidation of a popular hedge fund operation linked to the Japanese Yen caused stocks to fall from their record levels. On Wall Street, the S&P 500 lost 3% on August 5its biggest single-day cut since 2022. The Dow Jones It also experienced its worst sell-off in about two years that day, dropping more than 1,000 points.
However, since then, expectations of lower interest rates by the Federal Reserve and the improvement in economic data of USA have pushed stocks higher.
The S&P 500 The Dow is up 8% since Aug. 5 and was less than 1% from its all-time high set in mid-July, while the Dow is up about 7%. The rally has spilled over into the broader market, with the small-cap Russell 2000 up 3% following Jerome Powell’s comments on Friday.
However, on Monday, the New York stock market moved sideways. The Dow Jones rose 0.2%, while the S&P 500 fell 0.3% and the Nasdaq fell 0.9%.
Wall Street: on track to close out a volatile August
Stocks are coming off a strong week highlighted by comments from Chairman Powell laying the groundwork for interest rate cuts. Wall Street has been eagerly awaiting a rate cut, especially in light of some worrying economic data that sparked a sell-off in early August. and worried investors about high borrowing costs that could hurt the U.S. economy.
It should be noted that Powell did not indicate when or by how much interest rates might be cut.Traders, however, remain unanimous in their forecast for a rate cut at the Fed’s September policy meeting, according to the CME Group’s FedWatch tool.
“We think they’ll do 25 basis points in September, November and December, because they want the market to know that they’re not lagging, but at the same time, they want to make sure they don’t get into a tapering mode too quickly,” said Sam Stovall, chief investment strategist at CFRA Research. “Right now, Wall Street is still breathing a sigh of relief that the Fed will cut rates and is eagerly awaiting Nvidia results on Wednesday and PCE data this week as well..”
Source: Ambito
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