US. Equities posted gains on Thursday after US Federal Reserve Chairman Jerome Powell tightened market expectations for a short-term rate cut.
The S & P 500 (^ GSPC) rose 0.01% or less than 1 point (level 10): 35 h ET.
The Dow (^ DJI) rose 0.37% or 100.19 points and retreated slightly after beating 27,000 for the first time shortly after market opening. The Nasdaq (^ IXIC) climbed 0.1% or 8.36 points.
Powell will present its semiannual monetary policy report on Thursday, on a second and final day, before the Congressional Banking Committee.
In the House Financial Services Committee, the Fed said Wednesday that the Fed was ready to cut interest rates towards the end of the month to boost the US economy, given the perceived "uncertainties" in terms of trade tension and strength the world economy.
"The worries that have troubled the market – whether it is about trade policy and its impact on the global trading environment, about global [capital expenditure] worries about the Fed, consistently falling short of its inflation target and image – all With concerns over the market having been troubled, the Fed now appears worried, "said Matt Forester, chief investment officer for BNY Mellon's Lockwood Ad visors, Yahoo Finance.
Market participants considered Powell's comments to be unmistakably cautious and adjusted expectations for lower interest rates accordingly. Each of the top three domestic stock indices rose to a new daily record high on Wednesday and short-term bond yields fell.
Several Wall Street companies adjusted their expectations of the outcome of the Fed meeting in July when Powell reported it. As of Wednesday, Goldman Sachs' economists set their odds of a 25 basis point cut by 75%, a 50 basis point cut by 15%, and an unchanged policy by 10%. Morgan Stanley's and UBS's economists said the Fed must cut interest rates by a more aggressive 50 basis points as part of their base case demands.
Fed funds futures with a 71.4% likelihood and a 25bp cut from Thursday morning. along with a 28.7% chance of a 50-basis-point relief.
<p class = "canvas-atom canvas-text Mb (1,0em) Mb (0) – sm Mt (0,8em) – sm" type = "text" content = " Core consumer prices rose more-than-expected, according to a June 13 news release from the Labor Market Statistics Office: the so-called Consumer Price Index (CPI), which excludes volatile food and energy prices and considers them a better measure of underlying price developments rose 2.1% yoy in June, more than the 2.0% consensus analysts expected to see in May. "data-reactid =" 25 "> According to a June release by the Labor Market Statistics Office, core consumer prices rose more-than-expected in June the so-called Core Consumer Price Index (CPI), which excludes volatile food and energy prices and provides a better measure of underlying GDP In June, the price trend rose by 2.1% compared to the previous year. This was above the 2.0% increase consensus analysts expected to see in May.
The core CPI rose 0.3% month-on-month in June, up faster than the expected increase of 0.2%. This was the biggest increase in core CPI in over a year.
"It's a bit higher-than-expected, but it would take much more than a monthly data point to deter Powell from his restrained attitude." Mike Loewengart, Vice President for investment strategy at E-Trade Financial Corporation, communicated in an email. "The Fed has made it pretty clear that the negative impact of a slowing economy and continued trade pressures outweighed the positive impact of Goldilock's inflation rate and last week's solid employment report."
Including all categories, the overall CPI rose more sharply , as expected, 0.1% in June, which is in line with the May level. The overall CPI rose 1.6% yoy, matching expectations.
<p class = "Canvas Atomic Canvas Text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = " Meanwhile, the Initial jobless claims in the week to July 6 more than expected back The Labor Department said Thursday that initial jobless claims fell 209,000 over the review period, down 13,000, according to Bloomberg data data-reactid = "40"> Meanwhile, the initial jobless claims for the week ended July 6 more than expected reported the Labor Department on Thursday. Initial jobless claims fell 209,000 in the reporting period, down 13,000 from the previous year's upward revision. Consensus economists had expected Bloomberg with new jobless claims, which were at the level of the previous week.
However, continuing jobless claims rose to 1.723 million in the week ending June 29. This was above the expected 1.683 million and the revised 1.966 million surviving last week's jobless claims.
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = " Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck "data-reactid =" 43 "> Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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