NEW YORK, Sept 9 (Askume) – U.S. stocks closed higher on Monday and the dollar strengthened as markets awaited key data and central bank action.
All three major U.S. stock indexes rose more than 1%, with the S&P 500 and Dow ending four consecutive days of losses , recording their biggest weekly percentage losses since March 2022.
The tech-heavy Nasdaq rebounded last week after suffering its biggest Friday-to-Friday drop since January 2022.
The dollar strengthened ahead of Wednesday’s much-anticipated consumer price index report.
“Two things are happening,” said Greg Bassuk, chief executive of AXS Investments in New York. “Investors are reinvesting cash after last week’s heavy selling, and secondly, everyone is excited about the Fed cutting interest rates.”
“There’s a lot of bargaining going on today, and people are optimistic about the Fed,” Barsuk said.
Mixed data last week, particularly the August jobs report , caused investors to lower their expectations that the Federal Reserve could cut interest rates by a substantial 50 basis points at next week’s policy meeting.
The Labor Department’s consumer price index on Wednesday is expected to show that underlying inflation will keep falling toward the central bank’s 2% target.
According to CME data, financial markets believe there is a 71% chance that the Federal Reserve will cut the key policy rate by 25 basis points at the end of next week’s meeting, and a 29% chance of a 50 basis point cut.
The Dow Jones Industrial Average (.DJI) rose 484.28 points, or 1.2%, to 40,829.69; the S&P 500 (.SPX) rose 62.65 points, or 1.16%, to 5,471.07; the IX rose 193.77 points, or 1.16%, to 5,471.07. The IX rose 0.60 to 16,884.
European stocks rose as investors await an expected interest rate cut by the European Central Bank later this week, with the benchmark Stoxx 600 index recovering from last week’s sharp losses.
“Last week’s economic data was very weak both in the US and globally, leaving investors nervous about the possibility of a recession,” Bassuk said.
“With buying slowing and confidence growing that many central banks are moving from aggression to easing, there is greater hope that central banks can avoid a global recession.”
The pan-European STOXX 600 index (.STOXX) rose 0.82% and the MSCI global equity index (.MIWD00000PUS) gained 0.58%.
Emerging market stocks fell 1.07%. MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) closed down 1.13%, while Japan’s Nikkei share average (.N225) fell 0.48%.
World stock indices as per Friday’s closing levels:
US Treasury yields have remained volatile this month amid uncertainty about the scale of the Fed’s expected rate cut.
The benchmark 10-year Treasury note was last up 1/32 in price, yielding 3.7061%, up from Friday’s high of 3.71%.
On Friday, the price of the 30-year Treasury bond rose 8/32, lifting the yield to 4.0066% from 4.02%.
The dollar strengthened against its competitors across the globe as investors focused on key inflation data and waned expectations for a policy rate cut next week.
The US dollar index (.DXY) rose 0.41% and the euro fell 0.42% to $1.1037.
The Japanese yen fell 0.48% against the US dollar to trade at 143.01 per US dollar; the British pound was down 0.39% on the day to trade at 1.3072 against the US dollar.
Crude oil prices rose after a sharp drop last week as hurricanes are expected to hit Louisiana this week, raising supply concerns.
US crude oil rose 1.54% to close at $68.71 per barrel, and Brent crude oil rose 1.10% to close at $71.84 per barrel.
Gold prices pared gains but held steady as investors await key inflation data.
Spot gold rose 0.4% to $2,505.75 per ounce.
