Fed's Potential Dovish Shift Rockets S&P 500, Nasdaq Futures to Record Highs
Futures for the S&P 500 and Nasdaq hit record highs with confidence in the Federal Reserve's potential dovish shift. Despite core inflation rising, a weak job market and Federal Reserve changes suggest possible rate cuts. Investor focus remains on policy remarks and earnings, amid ongoing geopolitical and corporate developments.
Futures linked to the S&P 500 and Nasdaq surged to record highs on Wednesday, driven by growing investor confidence in a potential dovish turn from the Federal Reserve. This anticipated policy easing comes despite core inflation posting its largest increase this year.
The S&P 500 closed at its highest in two weeks, spurred by a rally following signs that import taxes haven't fully impacted consumer prices. Interest rate futures suggest a 98% likelihood of a 25 basis point rate cut as investors favor the Fed's potential easing cycle amid labor market concerns.
Meanwhile, volatile sectors benefited from a steepening yield curve, especially banks, which saw marginal gains. Investors are closely monitoring monetary policy remarks and corporate earnings, particularly in light of geopolitical developments, such as the U.S.-China revenue-sharing deal and the Russo-Ukraine crisis.
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