Traders Take US Fed Interest Rate Cut In Stride As Powell In Focus: Markets Wrap
Equities extended their post-election rally, with the S&P 500 approaching the 6,000 milestone.
(Bloomberg) -- Stocks hit fresh all-time highs, Treasuries rebounded and the dollar fell the most since August, with traders awaiting remarks from Jerome Powell after the Federal Reserve cut rates by a quarter percentage point to support the economy.
Equities extended their post-election rally, with the S&P 500 approaching the 6,000 milestone. Treasury 10-year yields declined eight basis points to 4.35%. The Bloomberg Dollar Spot Index fell 0.6%.
US policymakers no longer included a line in their statement about achieving “greater confidence” that inflation is moving sustainably toward 2%, though they noted inflation has “made progress” toward the central bank’s goal. The committee modified its language around the job market slightly as well. Powell will hold a press conference at 2:30 p.m. Washington time.
“While the statement was ‘blah,’ I do think Powell tries to leave the December meeting more 50/50 and does not commit either way which compares with the current pricing of a 70% chance,” said Peter Boockvar, author of The Boock Report.
The S&P 500 rose 0.6%. The Nasdaq 100 added 1.4%. The Dow Jones Industrial Average was little changed. A Bloomberg gauge of the “Magnificent Seven” megacaps climbed 2.2%. The Russell 2000 of small firms fell 0.2%.
Most major groups advanced, with Apple Inc. and Nvidia Corp. leading gains in megacaps. Lyft Inc. jumped 24% after the ride-hailing company gave a bullish outlook. A closely watched gauge of banks dropped 2% after gaining over 10% in the previous session. JPMorgan Chase & Co. slid 4% after an analyst downgrade.
The pound gained as traders pared bets on further Bank of England easing.
Some of the main moves in markets:
Stocks
The S&P 500 rose 0.6% as of 2:12 p.m. New York time
The Nasdaq 100 rose 1.4%
The Dow Jones Industrial Average was little changed
The MSCI World Index rose 0.8%
Bloomberg Magnificent 7 Total Return Index rose 2.3%
The Russell 2000 Index fell 0.4%
Currencies
The Bloomberg Dollar Spot Index fell 0.6%
The euro rose 0.5% to $1.0784
The British pound rose 0.7% to $1.2964
The Japanese yen rose 0.9% to 153.20 per dollar
Cryptocurrencies
Bitcoin rose 0.9% to $76,608.73
Ether rose 7.3% to $2,885.19
Bonds
The yield on 10-year Treasuries declined eight basis points to 4.35%
Germany’s 10-year yield advanced four basis points to 2.45%
Britain’s 10-year yield declined six basis points to 4.50%
Commodities
West Texas Intermediate crude rose 1.1% to $72.46 a barrel
Spot gold rose 1.2% to $2,692.16 an ounce
Get all the live updates on US Fed meeting here.
