Receding Inflation Expectations Drive U.S. Indexes to Record Highs for Fifth Consecutive Day

Barry Adams
14 Jun, 2024
Mumbai

Market indexes on Wall Street edged lower, but they are set to close higher for the week after inflation eased and investors held out for at least one rate cut in the year. 

The S&P 500 index and the Nasdaq Composite declined more than 0.2% in Friday's trading as investors reassessed the inflation and interest rate outlook. 

Despite Friday's market jitters, two benchmark indexes are set to close higher after a busy week of economic releases and monetary decisions from the Federal Reserve. 

Investors are hoping that the recent weakening in inflationary pressures may drive overall inflation towards the 2% target rate set by the Fed's policymakers. 

Consumer price inflation peaked in June 2022 and fell sharply to over 3% in June 2023, following the eleven interest rate hikes in 2022 and 2023. 

However, since last June, progress on inflation has stalled and stayed above 3% for eleven months, despite the Fed's hawkish comments and talks of restrictive interest rates. 

Moreover, home prices across the nation have doubled over the last four years, and food, energy, and automobile prices are also up between 100% and 300%, despite the Fed's tough talk and persistent drumbeat of price stability. 

 

U.S. Indexes and Treasury Yields

The S&P 500 index decreased 0.3% to 5,416.70, and the Nasdaq Composite fell 0.3% to 17,623.82. 

The yield on 2-year Treasury notes edged lower to 4.69%, 10-year Treasury notes decreased to 4.22%, and 30-year Treasury bonds edged higher to 4.36%.

WTI crude oil increased $0.14 to $78.76 a barrel, and natural gas prices fell 5 cents to $2.91 a thermal unit.

Gold increased by $27.23 to $2,329.79 an ounce, and silver rose 30 cents to $29.22. 

The dollar index, which weighs the U.S. currency against a basket of foreign currencies, edged lower to 105.64.

 

U.S. Stock Movers

RH declined 14.4% to $237.02 after the high-end furniture retailer reported a larger loss in its latest quarter. 

Adobe Inc. soared 14.5% to $525.34 after the software company reported better-than-expected quarterly results and lifted its annual outlook.