Stocks edged higher on Monday, thereby sustaining the gains from last week’s rally as optimism rose around the likelihood that the Federal Reserve’s interest rate hikes are nearing an end. S&P 500 futures, as well as those listed on the Dow Jones Industrial Average and the Nasdaq 100, rose around 0.1%. This comes after the benchmark S&P 500 index gained almost 6% over the past week.
“There’s a bit more reason for investors to be more optimistic that the Fed is probably done with rate hikes, but one should not let one’s guard down,” Vasu Menon, managing director for investment strategy for OCBC Bank Singapore warned. Still, economic data does appear to support the case for the Fed to wind down its tight fiscal policy in response to inflation.
Forecasts of Fed rate cuts have largely been brought forward, with many pricing an initial rate cut by June next year. Optimism was spurred largely by a weaker US payrolls report than expected as well as a marginal rise in unemployment.
