Market Watch
Dow futures fell 16 points, S&P 500 futures 3 points, and Nasdaq 100 futures 20 points, all 0.1%.
Wall Street predicts a cautious trading day ahead of the Federal Reserve policy-setting meeting, influenced by Japan’s interest rate hike for the first time in two decades. Nvidia continues its developer conference, while Bitcoin experiences its largest one-day drop in two weeks.
Fed meeting
The Federal Reserve’s two-day policy meeting in Washington DC is expected to keep interest rates unchanged, with the focus on Chair Jerome Powell’s press conference and the bank’s new economic projections. The Fed is “not far” from gaining the confidence to start easing rates due to falling inflation. However, stronger-than-expected inflation reports have led to a reduction in bets on rate cuts this year, with traders now pricing in around 75 basis points of easing. The June Fed meeting is now in the spotlight, with a Reuters poll showing a strong majority of economists believing the Fed will cut its key interest rate.
Samsung Nvidia Link
Samsung Electronics is considering using Nvidia’s high bandwidth memory chips in its artificial intelligence processors, according to a report by Nikkei. Nvidia co-founder Jensen Huang said the firm is preparing to qualify Samsung’s HBM chips for future use. Samsung’s shares jumped over 5% to a 2-month high. HBM chips are crucial in AI development as they meet memory-heavy, high processing speed requirements for large language AI models. Nvidia has been a major beneficiary of the AI boom, with its stock up over 80% this year. Nvidia recently announced its latest chip, the B200 “Blackwell”, which is 30 times faster than its predecessor at some tasks.
UK Inflation Fall
The Bank of England has seen a slight cooling of British inflation in February, with consumer prices rising by 3.4% in annual terms, below the expected 3.5%. This is the lowest rate since September 2021 and suggests that inflation will eventually fall back to the central bank’s 2% target. Although the Bank of England is expected to keep interest rates at elevated levels, this data has raised bets that the BoE will start cutting interest rates in the summer.
Economic Calendar
7:00 MBA Mortgage Applications
10:00 Atlanta Fed’s Business Inflation Expectations
10:30 EIA Petroleum Inventories
2:00 PM FOMC Announcement
2:30 PM Chairman Press Conference
Other Key Events:
- Bank America Global Industrials Conference, 3/19-3/21, in London
- Keybanc Midwest Industrials Bus Tour, 3/19-3/20
- NVIDIA GTC 2024, 3/18-3/21
- Piper 24th Annual Energy Conference, 3/18-3/20, in Las Vegas
- S&P Global 39th Annual World Petrochemical Conference, 3/18-3/22, in Houston, TX
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U.S. inflation data for February is expected to provide insights into the future direction of Federal Reserve monetary policy. The overall consumer price index (CPI) is expected to match the previous month’s pace of 3.1% annually, with the core CPI expected to slow to 3.7% from 3.9% in January. However, the month-on-month gauge is expected to shed light on price gains momentum.
Fed officials have made cooling inflation the main objective of interest rate hikes, which have brought borrowing costs to over two-decade highs. They suggest cuts may be coming later this year, but need more evidence that price growth is sustainablely easing back down to their 2% annualized target. Analysts at ING believe inflation is likely too hot for comfort.
U.S. inflation data for February is expected to provide insights into the future direction of Federal Reserve monetary policy. The overall consumer price index (CPI) is expected to match the previous month’s pace of 3.1% annually, with the core CPI expected to slow to 3.7% from 3.9% in January. However, the month-on-month gauge is expected to shed light on price gains momentum.
Fed officials have made cooling inflation the main objective of interest rate hikes, which have brought borrowing costs to over two-decade highs. They suggest cuts may be coming later this year, but need more evidence that price growth is sustainablely easing back down to their 2% annualized target. Analysts at ING believe inflation is likely too hot for comfort.