Stocks Drop After Bullish Run – Europe Market Wrap
US equities remained on the back foot after two days of tosses as traders waited for new drivers to guide the market’s next move.
Contracts on the S&P 500 retreated 0.2% after concerns over stretched valuations and the pace of interest-rate cuts dragged the main gauge back from a record high. Intel Corp. extended gains after approaching Apple Inc. for an investment.
Bitcoin and other cryptocurrencies fell as the week neared a potentially volatile close, with $22 billion in large options expiries looming. Treasury yields rose. Copper’s rally advanced as traders weighed the impact of supply losses from Freeport’s huge Grasberg mine.
Bullishness fueled by rate cut anticipation and the artificial intelligence boom culminated last week when the Federal Reserve signaled a faster pace of easing to support a weakening jobs market. Since then, higher oil prices and caution from some officials have tempered the optimism amid a lack of clear catalysts.
Swaps currently imply around a 60% chance of two quarter-point US rate cuts for the rest of the year, down from 70% immediately after the Fed meeting. Policymakers penciled in two cuts in their projections.
Friday’s release of the Fed’s preferred inflation gauge may offer clues on the path ahead, with consensus forecasts pointing to a slower pace of price growth last month.
