Stock futures edged higher after another inflation reading reinforced market expectations that the Federal Reserve will keep its interest rates steady for the first time in 15 months.
(Bloomberg) — Stock futures edged higher after another inflation reading reinforced market expectations that the Federal Reserve will keep its interest rates steady for the first time in 15 months.
S&P 500 contracts signaled the US equity benchmark will top the 4,400 mark. A gauge of US producer prices declined by more than forecast in May. Tesla Inc. is poised to climb for a 14th consecutive session, extending a record winning streak. Advanced Micro Devices Inc. gained after the chipmaker showed off its planned line of artificial intelligence processors.
Treasury two-year yields, which are more sensitive to imminent Fed moves, dropped three basis points to 4.64%. The dollar retreated for a second session.
Fed policymakers are poised to pause their hiking of interest rates, while retaining a tightening bias that signals a possible resumption of moves as soon as next month. The rate decision and committee forecasts will be released at 2 p.m. in Washington. Chair Jerome Powell will hold a press conference 30 minutes later.
Since the 1950s, the S&P 500 Index declined a median of 5.5% six months after the last rate hike, according to data compiled by Ned Davis Research. But in recent decades it’s been bullish for stocks, with the benchmark equities gauge climbing more than 10% six months later in four of the past five final rate hikes.
Key events this week:
- China property prices, retail sales, industrial production, Thursday
- European Central Bank President Christine Lagarde holds press conference following the rate decision, Thursday
- US initial jobless claims, retail sales, empire manufacturing, business inventories, industrial production, Thursday
- Bank of Japan rate decision, Friday
- US University of Michigan consumer sentiment, Friday
Some of the main moves in markets:
Stocks
- S&P 500 futures rose 0.1% as of 8:35 a.m. New York time
- Nasdaq 100 futures rose 0.1%
- Futures on the Dow Jones Industrial Average fell 0.2%
- The Stoxx Europe 600 rose 0.6%
- The MSCI World index rose 0.2%
Currencies
- The Bloomberg Dollar Spot Index fell 0.3%
- The euro rose 0.3% to $1.0824
- The British pound rose 0.4% to $1.2662
- The Japanese yen rose 0.3% to 139.79 per dollar
Cryptocurrencies
- Bitcoin rose 0.5% to $25,973.79
- Ether rose 0.3% to $1,744.04
Bonds
- The yield on 10-year Treasuries declined one basis point to 3.80%
- Germany’s 10-year yield advanced three basis points to 2.45%
- Britain’s 10-year yield declined two basis points to 4.42%
Commodities
- West Texas Intermediate crude rose 1% to $70.08 a barrel
- Gold futures rose 0.3% to $1,964.80 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Brett Miller, Tassia Sipahutar, John Viljoen, Vildana Hajric and Carly Wanna.
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