S&P 500, Nasdaq 100 Climb To Record Highs As Data Fosters Rate Cut Optimism Ahead Of Fed Minutes; Gold, Bonds Rally: What's Driving Markets Wednesday?
The S&P 500 and Nasdaq 100 indices surged to new all-time highs on Thursday, as investors heightened their expectations for rate cuts following June’s sharply lower-than-expected services sector activity, which experienced its worst contraction since May 2020.
Market-implied odds of a Fed rate cut in September rose from 65% to 72%, according to CME Group’s FedWatch tool, with traders pricing in more than 50 basis points of rate cuts by year end, implying two fully priced rate reductions by the Fed.
Risk sentiment was particularly strong ahead of the Federal Open Market Committee (FOMC) Minutes, slated to be released at 2:00 p.m. ET.
Nvidia Corp. NVDA and the chip making industry, as tracked by the iShares Semiconductor ETF SOXX, rebounded, up 3.7% and 1.9%, respectively.
Strong gains also stemmed from gold miners, with the VanEck Gold Miners ETF GDX up 4.2%, eyeing one of the best-performing sessions year to date, driven by rising metal prices.
Expectations of lower interest rates fueled gold prices up by 1.4%, silver up by 3.5%, and copper up by 2.6%.
Treasury yields weakened sharply, with both the 10-year and 30-year yields down 7 basis points. The iShares 20+ Year Treasury Bond ETF TLT rose 1.1%, rallying the most since June 13.
However, the crypto market faltered, with Bitcoin BTC/USD down 2.7% to $60,450.
Major Indices | Price | 1-day %chg |
Nasdaq 100 | 20,168.73 | 0.8% |
S&P 500 | 5,531.06 | 0.4% |
Russell 2000 | 202.16 | 0.1 % |
Dow Jones | 39,273.72 | -0.1% |