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Wall Street opens sharply higher on rate cut expectations, S&P 500 hits record high

2019-06-20 22:00

  • Heightened expectations of Fed rate cuts boost stock markets on Thursday.

  • Energy sector outperforms rivals boosted by rallying oil prices.

  • All 11 major S&P 500 sectors start the day in the positive territory.



As hinted by the strong upsurge witnessed in the S&P 500 Futures, major equity indexes in the U.S. started the day sharply higher and the broad S&P 500 reached a fresh record high. The FOMC's dovish shift in its policy statement yesterday revived hopes of the bank cutting interest rate as soon as July and provided a boost to global stock markets. As of writing, the Dow Jones Industrial Average was up 0.9% on the day while the S&P 500 and the Nasdaq Composite were adding 0.95% and 1.3%, respectively. 



Among the 11 major S&P 500 sectors, which are all in the positive territory in the early trade, the Energy Index is rising nearly 2% to lead the rally on the back of a 4% increase in crude oil prices. On the other hand, the rate-sensitive Financial Index is only adding 0.05% on the day limited by falling Treasury bond yields.



Reviewing the FOMC event, “Overall, our econ team expects conditions to evolve sufficiently to warrant a cut in July, and view a 25bps move as more likely than 50bps, and they continue to anticipate a total of three rate cuts this year,” said Deutsche Bank analysts.



 


This article is published only for general use basic informatory purposes and should not be considered or depended on as a financial or investment advice. Investors should make sure that they understand the risks and seek independent financial advice at all times. CFDS ARE COMPLEX INSTRUMENTS AND COME WITH A HIGH RISK OF LOSING MONEY RAPIDLY DUE TO LEVERAGE.

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