Market Watch:-Dow, S&P 500, and Nasdaq 100 futures increased 110, 19, and 88 points, respectively.
US futures predict a higher Wall Street open, gold prices reach record high due to Federal Reserve rate cuts, trade volumes remain light, and oil prices rise.
US Markets
The US stock market has started strong, driven by optimism over artificial intelligence stocks and expectations of the Fed cutting interest rates this year.
All three main US indexes recorded significant quarterly gains, with the S&P 500 experiencing its biggest first-quarter gain since 2019.
The Fed’s ability to continue this rally into the second quarter is largely dependent on corporate earnings, which begin in April. Markets had expected six rate cuts, but only three have been priced in.
Gold on record High
Gold prices reached a record high on Monday due to a softer U.S. inflation reading, indicating the Fed’s first interest rate cut of the year in June. Spot gold was up 1.1% at $2,258.88 per ounce, while U.S. gold futures gained 1.8%. Traders are pricing in a 60% probability of the Fed cutting rates in June, as lower interest rates reduce the opportunity cost of holding bullion.
Microsoft will sell its Teams
Microsoft will sell its Teams chat and video app separately from its Office product globally, six months after unbundling the two products in Europe to avoid a possible EU antitrust fine. The European Commission has been investigating Microsoft’s tie of Office and Teams since a 2020 complaint by Slack. Microsoft will extend the steps taken to unbundle Teams from M365 and O365 in the European Economic Area and Switzerland to customers globally.
Economic Calendar
9:45 PMI Manufacturing Index
10:00 ISM Manufacturing Index
10:00 Construction Spending
6:50 PM Fed’s Cook Speech
Other Key Events:
- None
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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.