(Bloomberg) — Stocks rose as global markets stabilized after turmoil caused by failed bets on the size and timing of interest rate cuts by the Federal Reserve.
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U.S. futures pointed to the S&P 500’s first gains in five days as Wall Street opened. The dollar stabilized, while U.S. Treasuries pared earlier gains to trade flat.
Investors are enjoying gains after a record first-quarter rise as they grapple with a resilient U.S. economy and stubborn inflation that has forced them to recalibrate their rate bets. Money markets are reporting just two Fed rate cuts this year, starting in September, after a new round of inflation sent Treasury yields soaring to their 2024 highs.
However, offsetting their disappointment in the speed of the rate cuts, investors are more optimistic about growth and the potential impact on corporate profits, according to Peter Oppenheimer, head of global equity strategy at Goldman Sachs Group Inc.
“Growth is good, but it’s unlikely we’ll get the boost in rate cuts that markets have been waiting for,” Oppenheimer said in an interview with Bloomberg TV. “It causes some indigestion, so revenue will be really crucial here.”
Reports from Netflix Inc. and L’Oréal SA are expected after the close of their respective markets. Investors will also analyze early data on unemployment in the United States and speakers from many central banks.
In foreign exchange markets, the yen remained stable following a joint statement by US Treasury Secretary Janet Yellen, alongside the finance ministers of Japan and South Korea, citing “serious concerns » concerning the depreciation of the two Asian currencies. The global emerging market currency gauge rose for a second day, suggesting some stability after hitting a 2024 low earlier this week.
The dollar has surged about 4% this year, outperforming all major currencies, as the Fed’s reduced outlook for rate cuts fuels the greenback’s strength and rising U.S. yields.
Elsewhere, oil retained most of Wednesday’s 3% decline, hurt by weaker Chinese industrial data and swelling U.S. crude inventories, while gold rose.
Company strengths:
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Taiwan Semiconductor Manufacturing Co. reported its first profit rise in a year, after strong demand for AI revived growth at the world’s largest contract chipmaker.
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Blackstone Inc. collected more fees from large retail funds and credit strategies this year, offsetting a slower pace of deal closings, the asset manager said in its first-quarter report.
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Micron Technology Inc. is set to get $6.1 billion in Commerce Department grants to help fund domestic factory projects, part of an effort to bring back semiconductor production on American soil.
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Las Vegas Sands Corp. said renovations at an entertainment center and hotel in Macau would hit results this year, sending shares lower in extended trading.
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ABB Ltd. recovered by raising its profitability outlook for the year after stronger-than-expected orders, driven by demand for electrification products, helped offset declines in China.
Key events this week:
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Conf. Board Leading Index, Existing Home Sales, Initial Jobless Claims, Thursday
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Fed Governor Michelle Bowman speaks Thursday
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New York Fed President John Williams speaks Thursday
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Atlanta Fed President Raphael Bostic speaks Thursday
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BOE Deputy Governor Dave Ramsden and ECB Governing Council Member Joachim Nagel speak on Friday.
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Chicago Fed President Austan Goolsbee speaks Friday
Some of the main market movements:
Actions
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S&P 500 futures rose 0.2% as of 7:27 a.m. New York time.
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Nasdaq 100 futures rose 0.3%
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Dow Jones Industrial Average futures rose 0.2%
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The Stoxx Europe 600 increases by 0.1%
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The MSCI World index increased by 0.2%
Currencies
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Bloomberg Dollar Spot Index little changed
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The euro was little changed at $1.0674
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The British pound rose 0.2% to $1.2476
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The Japanese yen was little changed at 154.46 per dollar.
Cryptocurrencies
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Bitcoin rose 3.4% to $62,951.38
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Ether rose 3% to $3,060.61
Obligations
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The yield on 10-year Treasury bills changed little at 4.58%
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The German 10-year yield changed little at 2.47%
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The UK 10-year yield fell three basis points to 4.24%
Raw materials
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West Texas Intermediate crude fell 0.9% to $81.95 a barrel
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Spot gold rose 0.8% to $2,380.94 an ounce
This story was produced with the help of Bloomberg Automation.
–With help from Matthew Burgess, Sujata Rao, Francine Lacqua, Catherine Bosley and Kwaku Gyasi.
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