15 July 2024 | FXGT.com
Weekly Market Recap – Wall Street Hits Record Highs on Soft CPI Data
- Wall Street Hits Record Highs: The S&P 500, Nasdaq, and Dow Jones Industrial Average all reached record highs, driven by Federal Reserve Chair Jerome Powell’s comments hinting at potential interest rate cuts and a softer-than-expected June consumer price index report. The S&P 500 rose 1%, the Nasdaq 100 remained unchanged, and the Dow increased by 1.80%.
- US CPI Data and Interest Rate Cut Expectations: June’s consumer price index (CPI) report showed a softer-than-expected increase, with the annual inflation rate falling to 3%, the lowest in over three years. This reinforced market confidence in a 25-basis-point rate cut by the Federal Reserve in September, with expectations rising to above 90%.
- Gold Prices Surge as US Dollar Weakens: Gold prices surged above $2,400 per ounce following weaker CPI data, highlighting its safe-haven appeal amid shifting monetary policy expectations. Simultaneously, the US Dollar Index (DXY) fell to a five-week low near 104.00 due to declining US yields, and the increased expectations of Fed rate cuts.
- Global Currency Movements: The Japanese yen surged due to speculation of intervention after it fell to a 38-year low against the dollar. The euro and pound also saw gains, with the euro reaching its highest level since June and the pound hitting an almost one-year high, boosted by better-than-expected UK GDP data.
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