Equities & Bonds Hold Steady in wake of New S&P 500 Record – Europe Market Wrap

12 Feb 2024 12:31AMZN NVDA TSLA Energy US Bonds US Indexes USD

Traders took a breather as the S&P 500 reached a fresh high on expectations of more Fed interest rate reduction and lower inflation.

The rise in Big Tech that took the S&P 500 above 5,000 for the first time on Friday appeared to extend, as Amazon, Nvidia, and Tesla nudged higher in premarket trade. Moves beyond those standouts were moderate in S&P 500 and Nasdaq 100 futures trading, as well as for US Treasuries and the dollar.

The next market pressure point will be Tuesday’s consumer price index report, which is expected to show that the annual US inflation rate has fallen to 2.9%.

That would be the first reading below 3% since March 2021, indicating a disinflationary trend that will influence the breadth and timing of Fed rate reduction.

Swaps markets predict that the Fed would only slash interest rates four times in 2024, down from seven at the end of last year and somewhat more than the three that officials have planned.

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