- US stocks rose on Monday as investors turned their attention to the July CPI report.
- The Federal Reserve will use the inflation data to determine whether or not it needs to increase interest rates.
- The CME FedWatch Tool indicates that the Fed has stopped raising interest rates, and will reduce rates in March 2024.
US stocks moved up on Monday as investors turned their attention to the upcoming inflation numbers and how they will affect the Federal Reserve’s interest rate trajectory.
On Thursday, July CPI data is released. This, in conjunction with the August CPI data and the August job report will help the Fed decide whether to hike rates again during their September FOMC Meeting. Recent studies have shown that the Fed will likely raise interest rates again at its September FOMC meeting.Gas prices are likely to impact inflation in the coming months.
CME FedWatch Tool predicts that the Fed will keep the Fed funds rate at its current range between 5.25% and 5.50% through March 2024. The central bank then expects to cut rates slightly by 25 basis points. The Fed would only cut rates if inflation was on track to reach the Fed’s target of 2%.
Investors also take in the second-quarter results that have largely exceeded earnings expectations. With 85% of S&P 500 companies having already reported results, 81% are beating profit estimates by a median of 7%, while 64% are beating revenue estimates by a median of 3%, according to data from Fundstrat.
The US indexes were at this level shortly after 9:30 a.m. ET Monday’s opening bell:
This morning, here’s what you can expect to see and do:
Commodities, bonds and cryptocurrency:
- West Texas Intermediate crudeOil fell by 0.66%, to $82.27 a barrel. Brent crudeThe international benchmark for oil fell by 0.61%, to $85.71.
- GoldThe price of gold per ounce dropped by 0.05%, to $1975.10
- The yield of the 10-year Treasury increased by 3 basis point to 4.07%.
- Bitcoin declined 0.09%, to $29 019, and ether was unchanged at $1 827.
