Two rate cuts of a quarter percentage point each by the end of this year could be expected
Wall Street finished the month and the quarter on a positive note on Monday as equities joined the global rally fueled by Chinese markets. The S&P 500 climbed 0.4% to a new all-time high, the Dow Jones Industrial Average added less than 0.1%, and the Nasdaq Composite rose 0.4%.
However, gains were limited as investors were somehow deterred by Fed Chairman Powell’s relatively hawkish comments. Powell said that more interest rate cuts could be forthcoming but warned that the regulator «didn’t have a preset path.» Powell added that two rate cuts of a quarter percentage point each by the end of this year could be expected if the economy moves as expected.
Against this backdrop, the dollar climbed across the market on Monday, extending the ascent today. The USD index exceeded the 101.00 figure in recent trading, adding 0.23% on the day so far. As such, the greenback bounced from the area of mid-2023 lows and could receive an extra boost from the upcoming US jobs report on Friday if the figures come in stronger than expected.
Elsewhere, Asian equities were mixed on Tuesday, with Japanese shares rebounding after a sharp sell-off witnessed at the start of the week. Also, equities were boosted by positive data as a quarterly Tankan survey showed business confidence among large manufacturers remained steady at 13. Another report showed that the unemployment rate in Japan fell to 2.5% from 2.7% in July. Japan’s benchmark Nikkei 225 rallied nearly 2% during the session.
Meanwhile, gold prices held steady on Tuesday after two days of losses as the precious metal has retreated from fresh all-time highs seen last week just below the $2,700 psychological level. The December futures have settled around $2,665 during the European trading, adding 0.24% on the day. The bullion was somehow pressured by a stronger dollar in the aftermath of Powell’s speech.
