S&P 500 Grabs the Longest Winning Streak This Year – US Market Wrap

A rally in the world’s largest technology companies sent stocks to all-time highs, with Jerome Powell’s remarks to Congress doing little to deter traders from betting on Federal Reserve rate cuts this year.

For the first time in its history, the S&P 500 surpassed 5,600. A renewed bid for megacaps propelled the US equity benchmark to its longest winning streak since November, with Nvidia up more than 2.5% and Apple rising on news it plans to ship 10% more new iPhones after a bumpy 2023. Treasuries remained relatively stable following a strong $39 billion sale of 10-year bonds. Swaps are pricing in two Fed cuts in 2024, with a higher chance of the first coming in September.

As Wall Street braced for the consumer price index, Powell said the Fed does not need inflation to fall below 2% before cutting rates, but officials still have work to do. He stated that the labour market has cooled “pretty significantly.” Powell cited “good ways to go” on the balance-sheet runoff and stated that commercial real estate does not pose a threat to financial stability.

The US 10-year yield fell two basis points to 4.28%. Huw Pill, Chief Economist at the Bank of England, said the timing of a rate cut is still a “open question,” prompting traders to reduce their bets on an August cut. Oil prices rose as a US holiday increased demand for petrol and jet fuel.