US Tech Stocks Rebound – Nasdaq Up 2%
US tech stocks rebounded in trading yesterday as investors prepared for key earnings reports and the latest rate decision from the Federal Reserve Bank. Market heavyweight Nvidia surged 8% after a sharp 17% decline the previous day, helping to lift the Nasdaq by 2%. The S&P 500 gained 0.92%, while the Dow Jones Industrial Average rose 0.31%.
US Treasury yields were steady ahead of the Fed’s rate decision, with the 2-year yield down 0.4 basis points to 4.195% and the 10-year yield slipping 0.2 basis points to 4.532%. The US dollar appreciated against all major currencies, as concerns over tariffs resurfaced, pushing the DXY index up 0.52% on the day.
Oil prices also gained ground, with Brent crude rising 0.65% to $77.58 and WTI climbing 1.05% to $73.94. Meanwhile, gold edged closer to all-time highs as uncertainty continued to weigh on investor sentiment, rising 0.76% to $2,762.19.
Fed in Focus Today
Today is a significant day for North American markets, with rate announcements expected from both the Bank of Canada and the Federal Reserve. However, markets are likely to focus more on the Federal Reserve’s update later in the day than on the Bank of Canada’s decision, which will be announced closer to the New York session open.
The Federal Open Market Committee (FOMC) is widely expected to hold rates steady today. However, the accompanying statement and subsequent press conference have the potential to move markets significantly. Federal Reserve Chair Jerome Powell is expected to carefully balance two key messages: acknowledging positive progress in economic data, particularly inflation, while addressing the potential economic implications of the new government’s policies. How Powell navigates these competing factors could lead to sharp reactions across financial markets.
Data and Central Banks Ahead
It looks set to be a busy day for traders, with key data releases and a “double play” of central bank rate decisions during the North American session.
The day kicks off with important data from Australia, which could influence the Reserve Bank of Australia’s next moves. The Consumer Price Index (CPI) data is expected to show a 0.3% quarterly increase, with the annual headline figure projected at 2.5%. Meanwhile, the closely watched Trimmed Mean CPI is anticipated to rise by 0.6% quarter-on-quarter.
The European session is relatively quiet on the data front, but activity is expected to pick up significantly once the New York session begins. The Bank of Canada is forecast to cut rates by 25 basis points earlier in the session. Later in the day, attention will turn to the Federal Reserve’s major rate announcement. While no change in the federal funds rate is expected, the accompanying statement and press conference are likely to provide traders with substantial opportunities.
