Stocks Finish Well in the Green, Led by the Nasdaq
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Last Updated 4:40PM EST
Stock indices finished today’s trading session well in the green. The Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 increased by 0.71%, 1.06%, and 1.2%, respectively.
The consumer staples sector was the session’s laggard, as it only gained 0.39%. Conversely, the energy sector was the session’s leader, with a gain of 1.84%. In addition, WTI crude oil is up 2.19%, reaching $88.08 per barrel.
Furthermore, the U.S. 10-Year Treasury yield increased to 3.358%, an increase of more than four basis points. Similarly, the Two-Year Treasury yield also increased but only by one basis point. The Two-Year yield is trading around 3.574%. This brings the spread between them to -21.6 basis points. The negative spread indicates that investors still have fears of a recession.
Compared to three days ago, the market is pricing in a higher chance of a higher Fed Funds rate for the end of the year. The market’s expectations for a rate in the range of 4% to 4.25% increased from 20.77% (as of September 9) to 26.28% currently. Conversely, the expectations of a rate in between 3.75% to 4% decreased to 65.6%, down from 70.9%. In addition, the market is now only assigning a 5.5% probability to a range of 3.5% to 3.75%, down from 6.81%.
Stocks are in the Green Halfway Into Monday’s Trading Session
Last Updated 12:50PM EST
Stocks are in the green halfway into the day’s trade. As of 12.50 p.m. EST, the tech-heavy NASDAQ, the S&P 500, and the Dow Jones Industrial Average are up 0.93%, 0.85%, and 0.63%, respectively. The energy sector (XLE) is the star of the day so far, with a gain of 1.67%. Technology (XLK) and consumer discretionary (XLY) are the next biggest gainers, at 1.26% and 0.99%, respectively.
With a 1.02% gain, WTI crude oil has made a decisive break from $85 levels to $87.67 while bitcoin (BTC-USD) is participating in the optimism, with a 2.52% rise.
The relief rally continues on the optimism that inflation has peaked. Tomorrow’s August consumer price index data remains a key event to watch out for.
In the meantime, the U.S. 10-Year Treasury yield is now at 3.333%, representing a 0.012% increase over its earlier close. The Two-Year yield is down 0.018% to 3.553% from its previous close.
Last Updated 10:30AM EST
Stock futures are higher this morning as investors tried to keep the winning momentum from last week.
The Dow Jones Industrial Average (DJIA) is 1% higher, while the S&P 500 (SPX) is up 1.2%. Meanwhile, the Nasdaq 100 (NDX) has a gain of 1.3%.
Last week, the three major indexes broke out of a three-week-long losing period. The S&P 500, the Dow, and the Nasdaq 100 gained 1.53%, 1.19%, and 2.17%, respectively.
Key Economic Data Awaits
Wall Street is eagerly awaiting August’s consumer price index (CPI) reading to be released on September 13. This data will be crucial for the Federal Reserve to set the tone for its next meeting. The Fed is largely expected to repeat a 75-basis point interest rate hike in a continued offensive to fight the surging inflation.
The Fed has reiterated its commitment to taming inflation multiple times, saying that there is no chance of turning dovish when inflation is so high. Also, several experts believe that the real interest rate is still not in the positive territory, meaning that the Fed is not as aggressive as needed to bring inflation down.
On the bright side, in August there were sharp and conspicuous drops in the prices of gasoline, air tickets, hotels, and used cars. However, prices of food and other goods and services remained high.
But, no matter what the speculations are, stocks are expected to remain under pressure till the Fed’s September meeting reveals a new interest rate.
Other economic data that are due this week are the retail sales number and industrial production data, which are slated to be out on Thursday.
Experts believe that if the core inflation rate increases more than 0.3% month-over-month in August, stocks and bond prices will likely be pushed lower, and vice versa.
