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  • Writer's pictureRealFacts Editorial Team

The Market Starts Week Up on Renewed Rate Cut Optimism


Text saying S&P 500

The market indexes started the week off strong with solid gains in the first trading period. Connor Smith of Barron’s wrote, “The Dow Jones Industrial Average was up 176 points, or 0.5%. The S&P 500 was up 1%. The Nasdaq Composite was up 1.2%. The S&P 500 closed above its 50-day moving average for the first time since April 12, which could help reinforce hopes that the recent rebound can stick.” In addition to this, bond yields fell sharply, this is good news because bond yields and the equities markets have an inverse relationship.

 

Connor Smith then went on to concisely explain why the markets are rising, “Stocks have rallied since last week when Federal Reserve Chair Jerome Powell effectively took an interest rate increase off the table and said he believed monetary policy was restrictive enough to eventually bring inflation down to the central bank’s 2% target. Such comments, paired with Friday’s weaker than expected April jobs report sparked renewed hopes that a rate cut could come before election day.” It's still going to take time to bring inflation down as inflation has proven to be tougher than anticipated, but recent economic data has given many a renewed sense of hope that rate cuts may occur this year.

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