Nasdaq 100 Hits a Record and US Yields Fall as Powell Speaks – US Market Wrap
Wall Street bulls pushed stocks higher on easing Middle East tensions and balanced comments from Federal Reserve Chair Powell on the possibility of rate cuts. Treasury yields and the dollar fell. Oil sank.
The S&x;P 500 rose 1.1%, while the Nasdaq 100 climbed 1.5%, setting a new record since February. West Texas Intermediate crude fell nearly 15% over two sessions, settling around $64 per barrel. Two-year yields fell to about 3.8%. Money markets have fully priced in two Fed cuts by the end of 2025, with the odds of a July move approaching 20% from around zero a week ago. Those bets also increased during a drop in consumer confidence.
Traders continued to closely monitor Middle Eastern developments. Israel and Iran appeared to be following through on an unexpected ceasefire agreement announced by Trump, after the American leader reacted angrily to both sides’ early breaches of the deal.
Fed Bank of Minneapolis President Kashkari said officials need more clarity on how tariffs will impact prices even as recent inflation data has been “quite positive.” His New York counterpart, Williams, said it is “entirely appropriate” to hold rates while analyzing the effects of policy changes.
Fed Bank of Cleveland President Hammack said policymakers may keep borrowing costs stable for some time. Meanwhile, Boston Fed President Collins stated that the modestly restrictive stance is necessary.
Powell also stated that potential changes to a key capital buffer would strengthen banks’ roles as intermediaries in the Treasury market.
