US Markets Rally as Investors Look to Fed – Nasdaq up 2.7%
US stock indices rallied well in trading yesterday as investors looked to the Fed for earlier rate cuts and earnings results delivered a mixed bag. Tech stocks led the way after Alphabet delivered a solid earnings report, with the Nasdaq closing up 2.74%. The S&P added 2.03% on the day, while the Dow gained 1.23%. The dollar dropped after the previous day’s optimistic rally, with the DXY down 0.44% to 99.31, whilst Treasury yields fell on Fed comments hinting at a June cut—the 2-year off 7.4 basis points to 3.797% and the benchmark 10-year down 6.7 basis points to 4.315%. Oil prices moved higher on the back of the weaker greenback, with Brent up 0.64% to $66.54 and WTI up 0.84% to $62.79. Gold rallied 1.84% to $3,348.23 after its loss on the previous day.
Markets Poised for Moves Either Side
Markets seem to have hit a nervous patch in the last few days, with the initial euphoria from potential tariff reprieves replaced by tension about the details and timing of any moves. Investors are now craving certainty from the US administration on what tariffs will be implemented, with most now almost hoping for another ‘Trump Board Session’, similar to Liberation Day, where we are told exactly what the real tariffs will be. Many products are now trading in a ‘volatile limbo’ state, with flows still moving markets strongly due to recent volatility. However, most moves are lacking clear conviction, as the market still lacks certainty, but expect new trends to emerge in the near future when we do get more details on trade deals—with lower tariffs and more certainty likely to lead to more relief rallies.
Data and Geopolitics to Dominate into the Weekend
It looks like being another lively end to the week as traders face data updates throughout the trading day and remain glued to news screens for any fresh updates on global trade. The Asian session is due to start on the front foot after a good day on Wall Street, and focus will be on Japanese markets early in the day when key Tokyo CPI data is released—expected to show a hefty 3.2% year-on-year increase. The European session also looks busy, with UK Retail Sales data due out (exp. -0.3% m/m) and SNB Chairman Martin Schlegel due to speak. The New York session will see initial focus north of the border for Canadian Retail Sales numbers (exp. -0.4% m/m and Core -0.1% m/m) before dropping back south for any updates on tariffs and the University of Michigan revised data updates.
