US Markets Power Through Despite Dwindling Hopes Of An Interest Rate Cut

US Markets Power Through Despite Dwindling Hopes Of An Interest Rate Cut

The inflation rate jumped in the first quarter of the year before slowly ebbing in the second quarter of the year.

Juviraj AnchilUpdated: Thursday, July 04, 2024, 12:01 PM IST
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The US market appears to have developed a bit of immunity to the growing prospects of a declining hope of interest rate cuts. The marquee American indices, namely the S&P 500 and Nasdaq Composite, along with Russell 2000, did reasonably well with a rise of under a per cent, while the oldest of them all, the Dow Jones Industrial Average, lagged marginally.

US Markets In Green

This comes at a time when the probability of an interest rate cut after the next meeting seems unlikely.

In fact, according to the minutes of the recent Federal Reserve's Federal Open Market Committee meeting published on July 3, the Federal Reserve, headed by Jerome Powell, claims that although inflation is decreasing, it is not going at a rate that would allow a comfortable passage for rate cuts.

In fact, according to the minutes of the recent Federal Reserve's Federal Open Market Committee meeting published on July 3, the Federal Reserve, headed by Jerome Powell, claims that although inflation is decreasing, it is not going at a rate that would allow a comfortable passage for rate cuts. | AFP

In fact, according to the minutes of the recent Federal Reserve's Federal Open Market Committee meeting published on July 3, the Federal Reserve, headed by Jerome Powell, claims that although inflation is decreasing, it is not going at a rate that would allow a comfortable passage for rate cuts.

The inflation rate jumped in the first quarter of the year before slowly ebbing in the second quarter of the year.

On Wednesday, July 3, the Dow Jones Industrial Average closed marginally low at 0.061 per cent or 23.85 points, taking the overall tally to 39,308.00. The S&P 500 rose by 0.51 per cent or 28.01 points, closing at 5,537.02.

The tech-heavy Nasdaq composite reached 18,188.30 with a near 1 per cent gain, eventually ending the day with a rise of 0.88 per cent or 159.54 points.

The tech-heavy Nasdaq composite reached 18,188.30 with a near 1 per cent gain, eventually ending the day with a rise of 0.88 per cent or 159.54 points. |

US Interest Rates Stand At 5.25-5.50%

The tech-heavy Nasdaq composite reached 18,188.30 with a near 1 per cent gain, eventually ending the day with a rise of 0.88 per cent or 159.54 points.

In addition, the Russell 2000, which is made up of the smallest 2000 stocks, also saw a gain of 0.14 per cent or 2.75 points, taking the overall number to 2,036.62.

Since the beginning of 2021, the central banking system of the largest economy on the planet has exceeded its target of 2 per cent annual inflation.

The US interest rate currently stands at 5.25 to 5.50 per cent. Businesses now, rather than relying on debt at a higher interest rate would look in the possibilities of using their stocks to further push growth activities and increase revenue and net profit in the bargain.

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