Daily Updates

Wall Street rebounded last night, while US Treasuries fell further and the US dollar depreciated, as the markets continued to digest the Fed’s forward guidance. Expectations for the first fed funds rate cut have moved back to November, with another cut almost fully priced in for early 2025. Investors now await the April non-farm payrolls report scheduled for tonight.

US stocks were mixed last night, with the negative impact of Fed Chair Jerome Powell dismissing discussion on imminent rate cuts on the one hand, and the positive impact of quite solid job figures on the other. The Dow Jones managed to close 0.2% higher, but the S&P 500 and Nasdaq fell by 0.3% and 0.7%, respectively.

US stocks retreated last night in reaction to the upside surprise in the US employment cost index, which increased concerns the Fed may hold off on rate cuts for some time. The FOMC will announce an interest rate decision tonight. US Treasury yields picked up, while the US dollar appreciated, to be just short of its 2024 high.

The positive sentiment on Wall Street continued last night, supported by better-than-expected corporate earnings reports. The Dow Jones rose by 0.4%, while the S&P 500 and Nasdaq both gained 0.3%. Increases were recorded for all sectors except for communication services and financials.

US stocks picked up on Friday, closing the best week this year so far, supported by a rally in tech stocks and relief about the inflation outlook after PCE price indices came out roughly in line with expectations. US 2-year yields were steady at just below 5%, but there were declines for longer maturities.

Wall Street has had a choppy couple of days, with mixed trade on Wednesday night, followed by a strong drop at the open overnight and a subsequent partial recovery. The initial weakness during the overnight session was due to weaker-than-expected US Q1 GDP figures and the upside surprise to US Q1 PCE inflation. This combination saw US Treasury yields rise across the yield curve.