Wall Street Pulls the Reins as Fed Signals No Hurry for Further Rate Cuts
Wall Street Pulls the Reins as Fed Signals No Hurry for Further Rate Cuts
Wall Street’s stocks lingered near record highs on Monday, rebounding from an earlier dip after Federal Reserve Chair Jerome Powell indicated that the U.S. central bank would likely hold off on extra-large interest rate cuts if the economy remains strong.
Speaking at the National Association for Business Economics conference in Nashville, Tennessee, Powell indicated that he anticipates two additional rate cuts totalling 50 basis points this year, assuming the economy progresses as expected.
The Fed kicked off a new easing cycle earlier this month with a significant 50 basis point rate cut.
Looking ahead to next week, investors will focus intently on the September jobs report (Non-Farm Payrolls) due out on Friday, as it could significantly influence expectations for the Fed's actions during its November 6-7 meeting.
Preliminary data from the NYSE show the blue-chip Dow Jones Industrial Average rose 17.15 points, or 0.04%, to 42,330.15.
The Standard & Poor's 500, the benchmark of the global stock market, rose 17.15 points, or 0.04%, to 42,330.15, while the tech-heavy Nasdaq Composite advanced 69.58 points, or 0.38%, to 18,189.17.
Meanwhile, the 'Magnificent Seven' mega-cap tech stocks showed mixed results: Nvidia increased by 0.03%, Tesla by 0.5%, Meta (formerly Facebook) by 0.9%, Apple by 2.3%, and Alphabet by 1.2%.
In contrast, Amazon declined by 0.9%, while Microsoft gained 0.5%.
In bonds, crypto and commodities:
In the U.S. government bond markets, the yield on the 10-year Treasury, which influences mortgage rates and other economy-influencing loans, settled at 3.77%.
The policy-sensitive two-year yield, which closely tracks Federal Reserve interest rate adjustment expectations, closed at 3.63%.
Meanwhile, the bullish cheers faded as the cryptocurrency market lost momentum, with investors processing Powell's comments on interest rates.
Bitcoin, the largest digital currency, slipped below the US$65,000 mark in New York, putting the upside target of US$71,000 on hold after trading within an intraday range of US$62,901 to US$65,607, closing at US$63,339.
While the outlook remains bullish after breaking out above US$65,000, Monday's pullback may find initial support at US$61,750, with additional support anticipated between US$57,300 and US$53,500.
This could create a potential setup for a bounce from these levels.
While notable opportunities exist, traders should exercise caution and closely monitor signals, as increased market volatility due to renewed demand is anticipated.
Effective risk management and adaptable strategies will be crucial for navigating this volatility and capitalising on potential opportunities.
Ethereum mirrored Bitcoin's volatility, trading between US$2,579 and US$2,661 and closing at US$2,603.
Despite recent volatility, Ethereum requires a close above US$2,870 to regain its bullish momentum and set its sights on US$4,000.
Clearing the US$2,870 level is critical for sustaining the bullish outlook and making further gains.
However, a failure to maintain above this level may lead to renewed bearish pressure.
Support is now seen at around US$1,950–US$1,980; reassessment at this level is suggested.
Given the high volatility, traders should remain cautious, monitor prices closely, and apply effective risk management and adaptable strategies to navigate the market and capitalise on potential opportunities.
Precious metal prices remained volatile, with Spot Gold closing lower at US$2,635 an ounce as profit-taking emerged, while silver finished at US$31.28.
In the energy sector, Brent crude, the global benchmark, closed at $71.90, while the U.S. benchmark, West Texas Intermediate (WTI), settled at $68.12.
Meanwhile, the U.S. Dollar Index (DXY), which measures the greenback against a basket of currencies, rebounded to 100.80.
The Eurodollar was 1.1132, and the British pound finished at 1.3378. The Japanese yen ended lower at 143.88, and the Australian dollar was at 0.6920.
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