Last Updated: 4:08 PM EST
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Stock indices finished today’s trading session mixed. The Nasdaq 100 (NDX) and the S&P 500 (SPX) gained 0.69% and 0.09%, respectively. Meanwhile, the Dow Jones Industrial Average (DJIA) fell 0.49%. Earlier today, a couple of Federal Reserve officials shared their thoughts on inflation and noted that more patience is needed before making any changes to monetary policy.
Federal Reserve Vice Chair of Supervision Michael Barr said that the disappointing Q1 inflation data did not give him the confidence needed to ease monetary policy. Indeed, Barr emphasized that more time is needed to allow interest rates to balance demand and supply. He also considered adjustments to liquidity rules for larger banks, which may require them to maintain a minimum amount of collateral at the Fed’s discount window.
Furthermore, Federal Reserve Board Governor Philip Jefferson had a similar sentiment. Although April’s inflation reading was encouraging, it’s still too early for him to determine if the recent disinflationary slowdown will persist. Jefferson reiterated that the Federal Open Market Committee will not consider reducing the federal funds rate target until there is greater confidence that inflation is sustainably moving toward 2%.
Nevertheless, investors still believe that the Fed will cut rates in September. In fact, the CME FedWatch Tool places the implied probability at 50.7%, up from Friday’s 49%.
First Published: 5:24 AM EST
U.S. futures inched higher on Monday morning after a strong week of trading. The Dow Jones Industrial Average (DJIA) index closed above 40,000 for the first time, gaining 1.04%, while the S&P 500 (SPX) and Nasdaq 100 (NDX) climbed 1.54% and 1.74%, respectively. Futures on the Nasdaq 100, S&P 500, and Dow Jones were up by about 0.14%, 0.09%, and 0.02%, respectively, at 5:12 a.m. EST, May 20.
The positive stock market momentum is attributed to higher optimism about potential interest rate cuts in 2024 and strong corporate earnings. This week, investors will look forward to more clues on the interest rate trajectory when the Federal Reserve releases the minutes of the late-April meeting on Wednesday.
Among other key economic reports, S&P Global will release its Purchasing Managers Index for the Manufacturing and Service sectors for May on Thursday. Additionally, the University of Michigan will release its final consumer sentiment index for May on Friday.
On the earnings front, investors are looking ahead to Nvidia’s (NVDA) first-quarter earnings report due on Wednesday. Additionally, Palo Alto Networks (PANW), Macy’s (M), Zoom Video (ZM), Lowe’s (LOW), Snowflake (SNOW), and Target (TGT) will announce results this week.
Meanwhile, the U.S. 10-year treasury yield was up at the time of writing, floating near 4.42%. At the same time, WTI crude oil futures trended lower, hovering near $80.02 per barrel as of the last check.
Elsewhere, European indices opened higher today, buoyed by strong corporate results. Also, investors are awaiting Eurozone’s Services and Manufacturing PMI and consumer confidence report on Thursday.
Asia-Pacific Markets Traded Higher Today
Asia-Pacific indices traded higher today as investors are looking ahead to the release of key economic reports from China and Japan.
China’s Shanghai Composite and Shenzhen Component indices rose 0.54% and 0.43%, respectively. Also, Hong Kong’s Hang Seng index was up 0.42%. At the same time, Japan’s Nikkei and Topix indices closed higher by 0.73% and 0.82%, respectively.
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