All articles tagged with #fed rate hikes
The six-month Treasury yield rose to about 4% as the bond market prices in multiple Fed rate hikes, with 1- and 2-year yields climbing and banks offering brokered CDs above 4% to attract deposits, signaling higher funding costs and tighter policy ahead.
Gold edged up to about $4,031/oz but is on track for its worst quarterly performance since Q2 2013 as a firmer dollar and expectations of U.S. rate hikes weigh on non-yielding bullion; it would need a break above $4,100 to suggest a bottom, with the metal down more than 11% in June and broader weakness across precious metals.
Tech stocks led Friday’s market slide as investors priced in a higher-for-longer path for Federal Reserve rate hikes, dampening optimism around the AI-driven chip boom. The Nasdaq fell about 4%, the S&P 500 dropped 2.6%, and the Dow slid 1.35%. Chipmakers like Micron, Intel, Cisco and Nvidia led the losses after Broadcom’s weak guidance sparked a wider selloff, while AI-heavy giants such as Meta, Amazon and Microsoft also declined modestly. A stronger-than-expected jobs report pushed the 10-year yield higher, reinforcing rate-hike expectations, though analysts note the bar to hikes remains high and cuts aren’t imminent.
Micron Technology's stock fell about 5% as May payrolls data exceeded expectations, raising the odds of Federal Reserve rate hikes and pressuring tech stocks, even though Nvidia certified Micron's high-bandwidth-memory chips for its AI accelerators; investors remain focused on macro risks in a broad market sell-off.
Bank of America’s note says the Fed would likely hike rates only if Powell’s tenure lasts longer than expected, unemployment stays below 4.5%, and energy-price spillovers push broader inflation; higher energy and shipping costs could lift prices. Analysts warn a rate rise would pressure Bitcoin and stocks in the near term, but the crypto could later benefit as a currency-debasement hedge, with Bitcoin hovering around $70,000 after a spike toward the mid-$70,000s.
The stock market rally continued its upward trend, driven by a mild inflation report that led to a decrease in Treasury yields and the expectation of no further rate hikes by the Federal Reserve. The Nasdaq reached short-term highs, while the Russell 2000 saw gains but faced resistance. Several leading stocks signaled buying opportunities, although some are becoming overextended. Earnings reports from companies like Cisco Systems, Palo Alto Networks, and Alibaba had mixed results, with some stocks tumbling while others held up. Microsoft unveiled its own AI chip, and Walmart and Target reported contrasting earnings. Home Depot's earnings and sales fell again, while Boeing secured significant orders at the Dubai Airshow. Applied Materials is under investigation by the Justice Department, and Chinese internet giants Alibaba, JD.com, Tencent, and NetEase reported their earnings. Off-price retailers TJX and Ross Stores also released their earnings reports.
The odds of two more Fed rate hikes this year are increasing as markets anticipate a key inflation report. The stock market had a mixed session, with financials and industrials leading the way. Nike reported mixed earnings, while Apple received a new Street-high price target. The PCE inflation report is due out, following a series of strong U.S. economic reports. Dow Jones futures were little changed after hours.
The stock market rally is gaining momentum as the bank crisis appears to have peaked and Fed rate hikes are over or nearly so. A number of stocks are flashing buy signals, including Micron, Microsoft, Shift4Payments, Mobileye Global, STMicroelectronics, Wynn Resorts, DraftKings, Rambus, Skyline Champion, and Workday. Investors should gradually add exposure, but it's important to update watchlists and stay engaged. The market direction and leading stocks and sectors should be monitored daily.