US Stocks Close Higher With Fed Rate-Cut Expected
US stocks broadly ended Monday’s session higher as traders geared up for interest-rate decisions by major central banks across the globe due later this week.
The S&P 500 rose 0.4% while the Nasdaq 100 gained 1.5% to notch another record high. The 10-year Treasury yield was little changed at 4.39%. The Dow Jones Industrial Average fell 0.3%. The MSCI World Index rose 0.3%.
Sentiment in the US is relatively positive, with a widely expected quarter-point rate cut from the Federal Reserve on Wednesday seen as adding fresh support and extending stocks’ outperformance. That stands in contrast to losses in Asia and Europe on Monday after weaker-than-anticipated retail data in China.
Historically, most of the stock market’s December gains tend to come in the second half of the month, he said, adding that the S&P 500 had a positive net return in this period 78% of the time since 1957.
Traders are also parsing fresh economic data. On Monday, data showed that activity at US service providers is expanding at the fastest pace since October 2021. Meanwhile, a measure of New York state factory activity retreated by the most since last May.
The main focus remains Wednesday’s Fed decision, which will be followed by policy announcements in Japan, the Nordics and the UK this week. Even if we get a “hawkish cut” from the Fed, it would be because the central bank sees underlying strength in the economy, and that means the rally in US stocks could continue to broaden out, Tony DeSpirito, BlackRock’s global chief investment officer of fundamental equities, said on Bloomberg TV.
Source: Bloomberg
