Global stock indexes gained on Monday following Federal Reserve officials’ affirmation that last week’s significant interest rate cut was justified. The euro fell against the dollar, influenced by disappointing business activity data from the eurozone. U.S. Treasury yields rose as investors began to rule out an imminent recession in the economy.
Fed policymakers, including Minneapolis Fed President Neel Kashkari and Chicago Fed President Austan Goolsbee, supported the half-point rate cut, indicating it was essential for maintaining economic stability. Investors are now closely monitoring economic data to confirm that inflation is indeed easing, as emphasized by Quincy Krosby, chief global strategist at LPL Financial.
The Dow Jones Industrial Average rose 61.29 points (0.15%) to 42,124.65, while the S&P 500 increased by 16.02 points (0.28%) to 5,718.57. The Nasdaq Composite saw a modest gain of 25.95 points (0.14%) to 17,974.27.
In the global arena, MSCI’s stock gauge climbed 0.32% to 840.05, and the STOXX 600 index rose by 0.4%. The U.S. rate futures market reflects a 54% chance of a smaller 25-basis point cut in November and a 46% likelihood of a continued 50-basis point easing.
On the data front, a survey from S&P Global revealed a sharp contraction in eurozone business activity, particularly within the services sector. Meanwhile, U.S. business activity remained stable, with a rise in average prices suggesting potential inflationary pressures.
The dollar index increased by 0.14% to 100.92, with the euro down 0.45% to $1.1112. U.S. oil prices fell slightly, settling at $70.37 per barrel for crude and $73.90 for Brent. Investors are now focused on upcoming data releases, including the core personal consumption expenditures (PCE) index, which will be crucial for assessing inflation trends.
