4/30/2024

Wall Street stocks rise ahead of Fed meeting

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Key points:

  • US markets rose on Monday ahead of this week’s Federal Reserve meeting.
  • The growth leaders were Tesla (15.3%) and Apple (2.5%).
  • Shares of Alphabet, Meta Platforms, and Microsoft closed in the red.

American stock markets ended Monday in positive territory. Tesla and Apple shares showed the greatest gains, outpacing other companies. Investors are awaiting the Federal Reserve’s interest rate decision, which will be announced at its meeting scheduled for this week.

Analysts predict that the Fed will not only keep its key rate unchanged, but also its tough rhetoric.

The Dow Jones Industrial Average added 146.43 points, or 0.38%, to 38,386.09. The S&P 500 rose 16.21 points, or 0.32%, to 5,116.17. The Nasdaq Composite also rose 55.18 points, or 0.35%, to 15,983.08.

Tesla and Apple showed the greatest growth

Tesla shares surged 15.3% after making significant progress in securing regulatory approvals to launch an enhanced driver assistance program in China, its second-largest market after the United States.

Apple shares also rose, gaining 2.5%, after it reported resuming talks with OpenAI about the possible use of the startup’s generative artificial intelligence technology in its products.

At the same time, other mega-cap stocks closed in the red. In particular, Alphabet, Meta Platforms and Microsoft, which have already reported, showed a decline. Nvidia, after the initial fall, was able to win back losses and close in the black.

On the S&P 500, growth was observed in 9 of 11 sectors. The top performers were consumer staples, utilities, real estate, materials and industrials. Shares of communications and finance companies, on the contrary, showed the largest decline.

What are traders’ expectations from the Fed?

Markets are pricing in interest rates to fall by about 35 basis points (bps) this year, well below the 150 bps expected at the start of the year, according to LSEG data.

The key issue, in addition to the rate decision, which the Fed most likely will not make this week, remains the regulator’s rhetoric. She is expected to maintain a hawkish tone despite softening her rate forecasts.

Despite some uncertainty, the overall market trend remains upward. This week will be full of important events: on Wednesday the Fed will publish the minutes of its meeting, and on Friday data on unemployment in the non-farm sector will be released. Analysts predict that this trend will continue

At the same time, the Japanese yen strengthened against the dollar on Monday. Traders attribute this to possible intervention from the Japanese authorities aimed at supporting the currency, which is at lows in the last 30 years.

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