Presidential Discourse – US Market Wrap

Wall Street traders sent stocks higher as bonds yields fell after a string of weaker-than-estimated economic reports reinforced the case for the Federal Reserve to start cutting rates this year.

In a brief session ahead of the US holiday, the S&P 500 reached an all-time high on hopes that lower interest rates will continue to propel corporate America. Treasuries rose across the curve. The dollar fell as minutes from the June Fed policy meeting revealed members were waiting for proof that inflation was slowing and were divided on how long to keep interest rates high.

In the run-up to Friday’s jobs report, data showed the services sector contracted at the fastest pace in four years while the labor market saw further signs of cooling.

Investors also kept an eye on political developments, with Joe Biden struggling to contain pressures to abandon his reelection bid. Donald Trump lead over Biden grew in post-debate polls from the Wall Street Journal and the New York Times.

The S&P 500 topped 5,535, notching its 33rd record in 2024. Tesla Inc. extended its rally into a seventh straight session, leading gains in megacaps – though Amazon.com Inc. fell. Treasury 10-year yields dropped seven basis points to 4.36%. The dollar slipped.

Swap traders expect almost two rate cuts in 2024, the first in November, however, bets on a September decrease have surged. Economists expect a 190,000 increase in June NonFarm payrolls, a dip down from the previous month, with the unemployment rate remaining at 4%.