Stock market today: Nvidia set to build on milestones as S&P 500, Nasdaq hold near records
What percentage chance do traders currently see for a September interest rate cut, and how has this expectation changed from the previous week?
According to the CME FedWatch tool, traders currently see a 69% chance for a September interest rate cut. This expectation has increased from around 50% a week ago. The market has been influenced by recent soft economic readings, which have led to growing hopes for interest rate cuts.
How did Nvidia's market value compare to Apple's, and what was its market value as mentioned in the article?
Nvidia's market value surpassed Apple's, reaching a market capitalization of $3.012 trillion, compared to Apple's $3.003 trillion at the time. This made Nvidia the second most valuable company in the world, trailing only Microsoft2. The surge in Nvidia's market value was driven by strong demand for its artificial intelligence (AI) server chips, with its stock price more than tripling over the past year.
What specific economic indicators are investors looking at to assess the possibility of a Federal Reserve policy change?
Investors are closely watching several economic indicators to assess the possibility of a Federal Reserve policy change. Some of the key indicators include:
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Gross Domestic Product (GDP): The GDP measures the overall value of goods and services produced in the economy4. A strong GDP growth rate may indicate a healthy economy, while a weak GDP growth rate may signal the need for the Federal Reserve to adopt a more accommodative policy stance.
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Employment Figures: The monthly employment report provides insights into the labor market, including the number of jobs created, the unemployment rate, and wage growth. A tight labor market with low unemployment and rising wages may prompt the Federal Reserve to raise interest rates to prevent overheating, while a weakening labor market may lead to a more accommodative policy6.
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Inflation: Inflation measures the rate at which the general price level of goods and services is rising in the economy2. The Federal Reserve closely monitors inflation to ensure it remains within its target range. If inflation is consistently above or below the target range, the Federal Reserve may adjust its policy to bring it back in line.
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Consumer Spending: Consumer spending accounts for a significant portion of the U.S. GDP and is a key driver of economic growth. A strong consumer spending indicates a healthy economy, while a weak consumer spending may signal the need for the Federal Reserve to adopt a more accommodative policy.
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Treasury Yields: The yields on government bonds, particularly the 10-year Treasury yield, can provide insights into market expectations for future interest rates. A rising yield may indicate expectations for higher interest rates, while a falling yield may suggest expectations for lower interest rates.
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Housing Market: The health of the housing market, including housing starts, existing home sales, and mortgage rates, can also influence the Federal Reserve's policy decisions. A strong housing market may indicate a healthy economy, while a weak housing market may signal the need for a more accommodative policy6.
These indicators provide valuable insights into the health of the economy and can help investors assess the likelihood of a Federal Reserve policy change. However, it's important to remember that the Federal Reserve considers a wide range of factors beyond these indicators when making policy decisions.