6:09 PM · 5 July 2024

Wall Street at new highs driven by speculation of first rate cut in September 📣

Indexes on Wall Street continue to rise following the NFP report. Both US500 and US100 are trading at new historical highs. The report strengthened expectations of Federal Reserve rate cuts, with swaps predicting a full two cuts in 2024. Speculation about a potential first cut in September is also growing. Investors will look for confirmation of this path in the upcoming CPI report next week and statements from FOMC representatives. Currently, markets are pricing in nearly a 75% chance of a rate cut in September.

Markets are currently pricing in a 75% chance of the first 25 bp cut at the September 18 meeting and a full two cuts by the December 18 meeting. Source: Bloomberg Finance LP

US500

US500 contracts are gaining 0.40% today, above the 5600-point level. The gains are supported by the largest companies, including Alphabet (+2.3%), Meta (+4.3%), and Amazon (+1.4%). From a technical analysis perspective, the nearest support level in the event of a correction is the channel of the recent consolidation in the range of 5500-5560 points.

Source: xStation 5

TNOTE

Contracts reflecting the prices of 10-year Treasury bonds (TNOTE) are also gaining today, returning above the key 110-point zone. The prices are supported by a short-term upward trend (blue dashed line), with the next level for bulls to overcome still being 111 points.

Source: xStation 5

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