The US stock market experienced a positive shift on Monday as Wall Street prepared for a series of Federal Reserve discussions and a significant inflation report that could suggest the likelihood of additional interest rate cuts. The Dow Jones Industrial Average remained steady, whereas the S&P 500 saw a modest increase of 0.2%, and the Nasdaq Composite added 0.3%, reflecting investor optimism towards the Federal Reserve’s recent easing moves.
Gold prices surged to a record high, exceeding $3,750, as anticipation grew that the Federal Reserve might lower rates twice more before the end of 2025. Conversely, bitcoin and other cryptocurrencies fell sharply, with traders unwinding over $1.5 billion in positive bets.
Investors are eagerly awaiting Friday’s update on the Federal Reserve’s favored inflation measure, the Personal Consumption Expenditures (PCE) price index. Should the report reveal weaker-than-expected inflation, it could bolster the likelihood of a further interest rate cut in October. Projections suggest that while inflation pressures persist, they remain manageable enough not to derail the Fed from its current path.
A busy schedule of Federal Reserve speakers this week, including Chair Jerome Powell and the recently appointed Fed Governor Stephen Miran, will be closely monitored for any insight into future policy directions. Miran is expected to address his policy perspectives in New York, while Powell will speak the following day.
Additionally, the market is on alert for ramifications from former President Trump’s latest immigration measures, which impose a $100,000 fee on US companies for H1-B work visas. This action has prompted reactions from major tech firms such as Microsoft and Goldman Sachs, which have issued internal warnings to staff. The early trading session reflected mixed responses from large-cap tech stocks.
Further attention will be directed towards Micron Technology’s earnings for indications on demand driven by artificial intelligence, and Costco’s results will be scrutinized for insights into consumer spending patterns.
Overall, it’s a week filled with significant data points and speeches, which will provide markets with guidance on the potential future trajectory of interest rates and economic policy.