(Bloomberg) — Wall Street traders sent stocks higher as bonds yields fell after a string of weaker-than-estimated economic reports reinforced the case for the Federal Reserve to start cutting rates this year.
Most Read from Bloomberg
In a shortened session ahead of the US holiday, the S&P 500 hit an all-time high on bets lower rates will keep fueling Corporate America. Treasuries climbed across the curve. The dollar remained lower after minutes from the June Fed policy gathering showed officials were awaiting evidence that inflation is cooling and were divided on how long to keep rates elevated.
To Paul Ashworth at Capital Economics, the Fed minutes “feel dated” given subsequent signs of an economic slowdown. Michael Feroli at JPMorgan Chase & Co. said the minutes “lean dovish.” There was broad agreement that disinflationary pressures are prevalent, that the labor market is getting less tight, and that economic activity growth should continue moderating, he noted.
In the run-up to Friday’s jobs report, data showed the services sector contracted at the fastest pace in four years while the labor market saw further signs of cooling.
“Bad news is good news,” said Fawad Razaqzada at City Index and Forex.com. “That’s how risk assets reacted in the aftermath of today’s US data releases.”
Investors also kept an eye on political developments, with Joe Biden struggling to contain pressures to abandon his reelection bid. Donald Trump lead over Biden grew in post-debate polls from the Wall Street Journal and the New York Times.
The S&P 500 topped 5,535, notching its 33rd record in 2024. Tesla Inc. extended its rally into a seventh straight session, leading gains in megacaps — though Amazon.com Inc. fell. Treasury 10-year yields dropped seven basis points to 4.36%. The dollar slipped.
“Clouds are developing in the macro picture, but the glass-half-full mindset of investors continues to drive markets higher,” said Mark Hackett at Nationwide.
At Brown Brothers Harriman & Co., Win Thin and Elias Haddad noted that if the data cooperate, a September Fed cut…
..
