US Stock Indexes Gain Momentum Amid Easing Inflation and Fed Rate Cut Hopes

With a surge in interest rate sensitive megacap stocks and chip shares, the three major U.S stock indexes have entered positive territory, showcasing robust, monthly, quarterly and annual gains. As traders anticipate a more tranquil session, they remain optimistic as Friday’s encouraging inflation numbers can potentially lead to the Fed slashing rates sooner than expected. The noteworthy increase in crude prices has resulted in a 3% gain for energy shares while a historic deal for Manchester United and major advancement for Intel Corp add to the market’s momentum.

Summary

  • A positive trend is seen in major U.S indexes due to the rise in interest-sensitive megacap stocks.
  • Three indexes are trending towards monthly, quarterly and annual increases.
  • A decrease in inflation numbers on Friday might suggest a possible rate cut by the Fed.
  • Energy shares have seen a 3% increase, driven by rising crude prices.
  • A jump in Manchester United and Intel Corp’s share prices is also notable.

Not only did the three indexes experience consecutive weekly gains for the eighth time, a streak barely seen in recent years, but the primary index is also poised to record its highest quarterly gain in three years, just half a percent shy of its maximum closing high of January 2022. The index, when closing above 4,796.56, verifies that it has remained in a bull market since its 2022 low point in October.

A fortnight ago, the Fed’s hint at the cessation of its rate hike cycle and possible rate cuts by 2024 bolstered the eight-week rally. Presently, a 72.7% chance of a 25 basis point slash in the Fed funds target rate is expected by March, as predicted by CME’s FedWatch tool.

As of 2:10 p.m. ET, the indexes had significantly risen and all 11 sectors of the S&P 500 were in green. Spiking crude prices due to Middle East conflicts and the optimism stirred by potential Fed rate cuts contributed to a surge in demand and a more than 3% gain in energy shares.

Manchester United’s shares are trending at a 2.9% rise owing to Jim Ratcliffe’s acquisition of a 25% stake. Gracell Biotechnologies’ shares skyrocketed by over 60% following AstraZeneca’s announcement to purchase the China-based company for up to $1.2 billion. The Israeli government’s agreement to grant $3.2 billion to Intel Corp for the establishment of a $25 billion plant in southern Israel has resulted in a 4.7% rise in its shares.

The NYSE’s advancing issues outshone the declining ones by a 3.68-to-1 ratio, in the case of Nasdaq, a 2.23-to-1 ratio favored the advancers. The S&P 500’s 41 new 52-week highs and the Nasdaq Composite’s 186 new highs engagement are an additional highlight.

These market fluctuations can potentially influence asset trading and Forex markets, possibly impacting megacaps, energy stocks, and shares of Manchester United, Gracell Biotechnologies, and Intel Corp.

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