U.S. stocks started higher as investors awaited an anticipated interest rate cut by the Federal Reserve, with the S&P 500 edging up 0.4% and the Dow Jones Industrial Average gaining 116 points. Nasdaq composite also showed a 0.7% increase. Intel’s stock rose after the announcement of expanding its collaboration with Amazon Web Services to create customized chips. Treasury yields slightly increased following a report indicating higher retail spending than projected last month.
Anticipation for the Fed’s first interest rate cut in over four years led Wall Street to follow global market trends, with futures for the S&P 500 and Dow Jones Industrial Average rising before the opening bell. Intel saw a premarket surge of over 7% after unveiling an extensive deal with Amazon Web Services for AI chips production. Microsoft shares rose nearly 2% post the announcement of a $60 billion share buyback program and a 10% dividend increase to 83 cents per share.
Markets are closely watching the Fed’s decision, expected to mitigate the effects of the ongoing economic slowdown. Traders are considering a larger-than-usual rate cut of half a percentage point, which could impact inflation levels and economic growth. As the Fed aims to alleviate pressure on the economy and job market, concerns linger about the risk of a potential recession.
Apart from the Fed’s decision, traders are also anticipating U.S. retail sales data for August, which will provide insight into consumer behavior and the overall economy. In global markets, European stocks climbed, with Germany’s DAX and London’s FTSE 100 increasing by 0.6%, and Paris’ CAC 40 up by 0.5%. In Asia, the Nikkei index fell by 1% in Tokyo, while Hong Kong’s Hang Seng advanced by 1.4%.
The dollar weakened against the Japanese yen, trading at 140.57 yen. Market analysts expect the Bank of Japan to maintain its current rates during this week’s policy meeting, potentially further strengthening the yen. The euro remained stable at $1.1136. U.S. benchmark crude oil rose to $70.18 a barrel, while Brent crude slightly decreased to $72.67 a barrel.
On the previous day, the Dow surpassed its all-time high, closing at 41,622.08, with the S&P 500 inching up by 0.1% and the Nasdaq composite experiencing a slight decrease of 0.5%. Markets continue to monitor the Fed’s actions amidst economic uncertainties and global market fluctuations.
