US stocks edged higher, erasing earlier losses as confidence in significant interest-rate cuts solidified and Nvidia shares surged. Nvidia jumped over 4% following news that its CEO completed share sales, lifting the S&P 500 by 0.2% and the Nasdaq 100 by 0.5%. Meanwhile, swaps traders anticipated over three-quarters of a point rate cut by year-end due to weak consumer confidence data.
Initially, the benchmarks fell after the Conference Board reported the largest drop in sentiment since August 2021, with concerns about the labor market and disappointing manufacturing data. Carl Weinberg, High Frequency Economics’ chief economist, highlighted the stark decline in perceptions of job availability, hinting at potential economic warnings.
Two-year yields dipped to 3.54%, which BMO’s Ian Lyngen saw as beneficial for this maturity. Yet, Lyngen noted that unless diminished consumer confidence leads to reduced spending, it won’t influence monetary policy.
Fed Governor Michelle Bowman, the lone dissenter on last week’s 50-basis point cut, suggested a cautious approach to rate reductions, citing persistent inflation risks and a still-robust labor market. In contrast, other officials, like Chicago Fed President Austan Goolsbee, emphasized prioritizing employment over inflation, indicating a need for significant rate cuts.
Visa Inc. shares dropped around 4% following news of a potential Justice Department lawsuit over its alleged debit card monopoly. Estee Lauder rose on China’s new economic stimulus measures, benefiting from its significant Asian market presence.
Investors focus on upcoming data on the Fed’s preferred price metric and personal spending for further rate cut clues. Globally, equities rose as China announced substantial monetary stimulus, while European markets strengthened. The dollar weakened amidst these developments.
China’s stimulus includes reduced bank reserve requirements and substantial liquidity support, boosting its stock market. However, BNP Paribas’ Michael Sneyd warned that the stimulus’s economic impact would take time to materialize.
Oil prices rose on hopes of a stronger Chinese economy and tensions in the Middle East, while gold hit a record high.
This report was produced with support from Bloomberg Automation. For more stories, visit bloomberg.com.
Original Story https://www.livemint.com/news/us-stocks-grind-higher-led-by-nvidia-s-climb-markets-wrap-11727211272933.html
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