U.S. Indexes Look Towards Record Highs with High Hopes for Rate Cut In Four Weeks

Barry Adams
19 Aug, 2024
New York City

Stocks were little changed in early trading after indexes recovered for the second week in a row and erased losses for August. 

Earlier in the month, the S&P 500 index and the Nasdaq Composite tumbled in volatile trading amid growing worries of a U.S. economic slowdown after non-farm payrolls expanded at a slower-than-expected pace. 

However, market sentiment reversed and overcame worries of a slowdown after retail sales, inflation, and jobless claims data were ahead of market expectations. 

On the economic front, investors are looking forward to the release of existing home sales at 3.8 million units and new home sales near 0.6 million for July.

The S&P 500 index and the Nasdaq Composite are approaching their record highs as set about five weeks ago amid growing optimism around possible rate cuts by the Federal Reserve. 

Investors are hoping that policymakers are likely to cut rates by at least 25 basis points at the end of a two-day meeting on September 18. 

Those hopes may not be realized if the Fed decides to hold rates because, despite eleven rate cuts over 2022 and 2023, inflation is still closer to 3% and not near the 2% target set by the policy committee. 

 

U.S. Indexes and Treasury Yields

The S&P 500 index increased 0.1% to 5,558.92, the Nasdaq Composite fell 0.1% to 17,623.03, and the Russell 2000 index rose 0.4% to 2,149.63. 

The yield on 2-year Treasury notes edged higher to 4.08%, 10-year Treasury notes increased to 3.89%, and 30-year Treasury bonds inched higher to 4.14%.

WTI crude oil decreased $0.03 to $76.61 a barrel, and natural gas prices edged up 5 cents to $2.18 a thermal unit.

Gold advanced by $17.49 to $2,490.84 an ounce, and silver increased by $0.02 to $29.04. 

The dollar index, which weighs the US currency against a basket of foreign currencies, edged lower to 102.21.

 

U.S. Stock Movers

Icahn Enterprises decreased 6.2% to $15.93 after the Securities and Exchange Commission fined activist investor Carl Icahn for failing to disclose the company's stock as collateral for personal margin loans. 

Carl Icahn and Icahn Enterprises agreed to pay $0.5 million and 1.5 million, respectively, according to the company announcement. 

AMD increased 2.2% to $151.97, and the advanced semiconductor company agreed to acquire ZT Systems for $4.9 billion. 

Estee Lauder Companies decreased 1.8% to $93.20, and the cosmetic company announced weaker-than-expected quarterly results. 

Chief executive Fabirizio Freda said he plans to step down at the end of fiscal 2025, ending in June 2025, after leading the company for sixteen years. 

Dutch Bros. declined 2.5% to $31.86 after Piper Sandler downgraded the stock to "neutral" from "overweight.'