Market Summary
US Futures Rebound After Fed Rate Hike: US stock futures rebounded and Treasury yields eased after the Federal Reserve raised interest rates for the first time since 2023. Fed Chair Kevin Warsh’s commitment to tackling inflation reassured investors.
Fed Raises Rates by 25 Basis Points: The Fed unanimously increased its benchmark interest rate by 25 basis points to a range of 3.75% to 4%. S&P 500 futures rose 0.4%, European shares were poised to advance and Asian equities slipped 0.1%. The dollar held its gains, while the contained reaction in longer-term bond yields suggested relief over the Fed’s inflation-fighting credibility despite concerns about slower growth.
Markets Price in Further Tightening: Markets are pricing in a greater than 50% chance of another rate hike in October, with Warsh’s comments pointing towards further tightening.
Bank of England and Bank of Japan in Focus: Attention now turns to the Bank of England, which is expected to hold rates, and the Bank of Japan, which is expected to raise them by 25 basis points.
Oil Falls as Supply Outlook Improves: Brent crude fell 0.9% to around $104.90 a barrel as prospects improved for restoring Saudi pipeline capacity and easing supply disruptions in the Middle East.
Gold Rebounds: Gold recovered overnight and is currently trading just above $4,300 an ounce.
Key Market Moves Today
- S&P 500 Futures: +0.71% (7,675)
- Brent Crude: -1.56% ($104.17)
- Spot Gold: +1.32% ($4,320)
- Bitcoin: Just below $76,000
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