US stocks hit fresh records
US stock indices ended Friday with another round of record highs, extending the strong momentum seen throughout the week. The gains were driven by hopes of further rate cuts this year after the Federal Reserve dropped its Fed Funds rate by 25 basis points on Wednesday - its first reduction in rates since last December. According to the CME’s FedWatch Tool, the market now anticipates another 50 basis points-worth of easing before year-end.
On Friday, the Dow, S&P 500 and NASDAQ posted gains of 0.4%, 0.5% and 0.7% respectively, to all close at fresh record highs. The Russell 2000 put a dent in the bullish sentiment by closing down 0.8%. But for the week, all the majors posted decent gains, led by the NASDAQ and Russell 2000, which both added 2.2%.
Source: TN Trader
But US stock index futures began the new week on the backfoot. All the majors pulled back from their best levels as investors look for additional clarity over the Fed’s next moves. To that end, this week sees a host of Fed speakers, with Chair Jerome Powell scheduled to talk tomorrow afternoon.
Today brings updates from FOMC members John Williams, Alberto Musalem, Thomas Barkin and Beth Hammack. But the attention looks likely to focus on Stephen Miran, President Trump’s preferred and controversial candidate as Fed governor, replacing Adriana Kugler, who resigned in August. Mr Miran, who voted for a 50 basis point rate cut at last week’s meeting, will have to address critics who question his independence, given his existing role at the White House.
Investors will also turn their attention to this week’s macroeconomic data, particularly the PCE inflation print due on Friday. Thursday's weekly Unemployment Claims will also be watched closely, particularly as the US central bank signalled that recent weakness in the labour market has overtaken stubbornly high inflation as its chief concern.