U.S. equity markets rose on Tuesday, tracking near all-time highs, in anticipation of further signals from the Federal Reserve regarding interest rates.
Wall Street indexes rose slightly on Monday, with the S&P 500 and the Dow Jones Industrial Average setting new record highs at the close.
Fed Speeches and PCE Data Anticipated
This week, attention is focused on several Federal Reserve officials’ speeches, particularly from Federal Reserve Chairman Jerome Powell, as markets seek further guidance on the central bank’s rate-cutting plans. Minneapolis Fed President Neel Kashkari indicated that the Fed might slow its pace of future rate cuts, while Atlanta Fed President Raphael Bostic stated that the economy is normalizing faster than expected. However, he dismissed the idea of rushing into further rate reductions.
Fed Governor Michelle Bowman’s speech at the Kentucky Bankers Association’s annual convention will also be closely watched, as she was the only dissenter on the size of the previous week’s rate cut. Last week, the Fed cut rates more than market estimates, signaling the start of an easing cycle that analysts believe could lead to a 125 basis point reduction by year-end. Investors are also awaiting Friday’s PCE price index release, which is expected to provide more clarity on inflation trends.
Boeing Offers Labor Agreement
In the corporate sector, Boeing has offered a more favorable labor agreement to its 30,000 striking employees in the U.S. Pacific Northwest. However, the union has stated that it will not put the proposal to a vote. Boeing’s latest offer includes a 30% wage increase over four years, along with improved retirement benefits and a larger ratification bonus if the workers accept the offer by Friday.
Deere & Company shares fell pre-market after former President Donald Trump threatened the company with a 200% tariff if it relocates part of its production to Mexico. AutoZone and KB Home are also set to release their quarterly earnings later in the day.
Chinese Stimulus Boosts Crude Oil Prices
Crude oil prices advanced on Tuesday, supported by monetary stimulus measures from major importer China and escalating tensions in the Middle East. Stimulus measures adopted by China fueled expectations of expanding demand for crude oil from the world’s largest importer.
On the other hand, the Israeli army announced that it had launched airstrikes against Hezbollah facilities in Lebanon on Monday, raising fears of a supply disruption from this oil-rich region and putting global markets on edge.
