Market Commentary - Foreign Markets
US stocks optimistic after FOMC keeps rate cut hopes intact As on : 01-Aug-24  11:01

US equities registered a strong performance on Wednesday following the Federal Reserve's monetary policy announcement and positive reaction to some of the latest corporate earnings news. The Nasdaq soared 451.98 points or 2.6 percent to 17,599.40, more than offsetting the 1.3 percent slump seen during yesterday's session. The S&P 500 also jumped 85.86 points or 1.6 percent to 5,522.30, while the Dow rose 99.46 points or 0.2 percent to 40,842.79.

The tech sector was the top performer as Nvidia surged by 12.8% after Morgan Stanley renamed it a top pick, erasing a portion of recent losses due to the stock market's rotation toward traditional sectors of the economy. AMD also jumped by 4.4% after the company's results topped estimates.

The Fed said it is attentive to the risks to both sides of its dual mandate after previously saying it was highly attentive to inflation risks. Fed Chair Jerome Powell said during his post-meeting press conference that a rate cut in September would be on the table if economic data continues on its current bath. The Federal Reserve maintained the federal funds rate at a 23-year high of 5.25%-5.50% for the 8th consecutive meeting in July 2024.

US treasuries extended the upward move seen over the past several sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell 3.4 basis points to a four-month closing low of 4.109 percent. The dollar index also moved lower below 104 mark.

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