(Bloomberg) -- U.S. stocks are set to scale yet another all-time high Tuesday as investors await Federal Reserve Chair Jerome Powell’s testimony to Congress for clues on the U.S. interest-rate outlook.
Futures on the S&P 500 gained after the benchmark set its 35th record for the year, with the second-quarter reporting season about to get underway. Contracts on the rate-sensitive Nasdaq 100 were also higher before Powell’s address.
Investors will be keying into any hints from the Fed chair about how soon policymakers will be in a position to cut interest rates. A long-awaited pivot to easier policy would provide investors sitting on a record US$6 trillion of money-market with an incentive to buy bonds and other assets.
“Until they see the Fed truly cutting, there is a level of show-me,” said Anders Persson, chief investment officer at Nuveen. “There’s some skepticism about getting off the cash or money market investments that pay five per cent and many retail investors are sitting on and enjoying.”
Markets are pricing the chance of two rate cuts this year, with a roughly 70 per cent chance of the first in September, according to swaps data compiled by Bloomberg.
Powell is also likely to face pointed questions over U.S. plans to force Wall Street lenders to set aside significantly more capital. Reuters reported that regulators are considering a change to calculations that could save the country’s eight largest banks combined billions of dollars.
European stocks dropped, as wariness grew over French government spending following the left’s resurgence in the weekend election.
Among individual stock movers, BP Plc fell more than three per cent after saying it will take a hit of as much as $2 billion from impairments in second-quarter results. Dassault Systemes SE fell after cutting its full-year earnings forecast.
The U.S. corporate earnings season kicks off on Friday with results from JPMorgan Chase & Co.
Key events this week:
- China aggregate financing, money supply, new yuan loans, from Tuesday
- Jerome Powell delivers semi-annual testimony to the Senate Banking Committee, Tuesday
- US Treasury Secretary Janet Yellen testifies to the House Financial Services Committee, Tuesday
- Fed’s Michael Barr and Michelle Bowman speak, Tuesday
- China PPI, CPI, Wednesday
- Jerome Powell testifies to the House Financial Services Committee, Wednesday
- Fed’s Austan Goolsbee, Michelle Bowman and Lisa Cook speak, Wednesday
- US CPI, initial jobless claims, Thursday
- Fed’s Raphael Bostic and Alberto Musalem speak, Thursday
- China trade, Friday
- University of Michigan consumer sentiment, US PPI, Friday
- Citigroup, JPMorgan and Wells Fargo’s earnings, Friday
Some of the main moves in markets:
Stocks
- S&P 500 futures rose 0.2% as of 8:23 a.m. New York time
- Nasdaq 100 futures rose 0.3%
- Futures on the Dow Jones Industrial Average were little changed
- The Stoxx Europe 600 fell 0.5%
- The MSCI World Index was little changed
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at $1.0815
- The British pound was little changed at $1.2802
- The Japanese yen fell 0.2% to 161.09 per dollar
Cryptocurrencies
- Bitcoin rose 2.1% to $57,458.61
- Ether rose 2.7% to $3,079.07
Bonds
- The yield on 10-year Treasuries advanced two basis points to 4.30%
- Germany’s 10-year yield advanced three basis points to 2.57%
- Britain’s 10-year yield advanced four basis points to 4.15%
Commodities
- West Texas Intermediate crude fell 0.6% to $81.86 a barrel
- Spot gold was little changed
This story was produced with the assistance of Bloomberg Automation.
With assistance from Matthew Burgess and Aya Wagatsuma.
©2024 Bloomberg L.P.