(Bloomberg) — Wall Street was poised to open near record highs on Monday as investors shunned the inflationary impact of rising commodity prices and expected another rate cut this year.
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Nasdaq 100 Index contracts rose 0.2% and S&P 500 contracts rose 0.1%. Traders are awaiting Wednesday’s results from Nvidia, the artificial intelligence powerhouse that has driven much of Wall Street’s gains this year and accounts for 5% of the S&P’s market capitalization. Nvidia shares rose about 1.5% in premarket trading, and other chipmakers including Micron Technology also rose.
In Europe, record high prices for copper and gold pushed up stock prices. The Stoxx Europe 600 Index hovered near record highs, led by mining stocks such as Glencore and KGHMSA.
Copper prices rose to record highs, with futures prices on the London Metal Exchange exceeding $11,000 for the first time. Gold rose above its all-time high set in April, providing a tailwind for the safe-haven metal as the death of Iranian President Ebrahim Raisi in a helicopter crash heightened concerns about renewed tensions in the Middle East. Oil prices have remained stable, rising 10% so far this year.
The Bloomberg Commodity Index is up nearly 5% this month, raising concerns that a new rise in inflation could take the shine off stocks and bonds. But many investors are confident that price pressures will continue to ease, allowing the U.S. Federal Reserve, the European Central Bank and others to cut interest rates in the coming months.
“Basically investors are not concerned about the health of the economy,” said Gene Salerno, chief investment officer at SG Kleinwort Hambros Bank. “Rising commodity prices are just one component of inflation, and we’re not too worried about it.”Other aspects of inflation, such as the bubble in the job market, are also starting to dissipate. ”
The timing of the Fed’s likely move to cut interest rates has shaped trading across financial markets in recent days. On Friday, the blue-chip Dow Jones Industrial Average closed above 40,000 for the first time, and the S&P 500 index set a series of new highs. That has led Morgan Stanley strategist Michael Wilson, a prominent Wall Street bear, to turn positive on the stock market and predict further gains.
Bloomberg’s dollar index remained flat after falling last week after data showed U.S. inflation eased more than expected last month. The 10-year Treasury yield is more than 20 basis points below its level at the end of April.
However, many policymakers are calling for caution in cutting interest rates, with the ECB’s Martins Kazaks recently warning against cutting rates too quickly after the first steps in June. Cleveland Fed President Loretta Mester, New York Fed President John Williams and Richmond Fed President Thomas Barkin said last week that it could be a while before inflation eases to the 2% target.
Investors will be watching for more Fed officials to speak this week, including from Governor Christopher Waller, who will talk specifically about the U.S. economy and monetary policy.
This week’s main events:
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BOE Deputy Governor Ben Broadbent speaks on monetary policy communication on Monday
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Chile GDP, Monday
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Reserve Bank of Australia releases minutes of May policy meeting on Tuesday
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Canadian Consumer Price Index, Tuesday
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Fed Director Christopher Waller speaks on U.S. economy and monetary policy on Tuesday
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BOE Governor Andrew Bailey speaks on Tuesday
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New Zealand interest rate decision Wednesday
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Indonesia interest rate decision Wednesday
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South African CPI, Wednesday
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UK CPI, Wednesday
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FOMC Minutes of Wednesday Policy Meetings from April 30th to May 1st
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Singapore CPI, GDP, Thursday
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South Korean interest rate decision Thursday
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India S&P Global Manufacturing and Services PMI Thursday
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Eurozone S&P Global Services PMI, S&P Global Manufacturing PMI, Consumer Confidence, Thursday
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U.S. new home sales, new unemployment claims, Thursday
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Chile interest rate decision Thursday
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Japan CPI, Friday
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German GDP, Friday
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Malaysia CPI, Friday
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US Durable Goods, University of Michigan Consumer Sentiment, Friday
The main movements in the market are:
stock
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As of 12:15pm London time, the Stoxx European 600 was up 0.2%.
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S&P 500 futures rose 0.1%
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Nasdaq 100 futures rose 0.2%
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Dow Jones Industrial Average futures little changed
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MSCI Asia Pacific Index rose 0.4%
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MSCI Emerging Markets Index rose 0.2%
currency
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Bloomberg Dollar Spot Index little changed
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The euro was almost unchanged at $1.0866.
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The Japanese yen remained almost unchanged at 155.74 yen to the dollar.
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The offshore yuan fell 0.1% to 7.2410 yuan to the dollar.
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The British pound was almost unchanged at $1.2698.
cryptocurrency
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Bitcoin rose 1.7% to $67,253.84.
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Ether rose 1.1% to $3,107.2
bond
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The 10-year government bond yield was almost unchanged at 4.42%.
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German 10-year bond yield remains unchanged at 2.52%
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The UK 10-year bond yield rose 1 basis point to 4.14%.
merchandise
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Brent crude oil fell 0.3% to $83.76 per barrel.
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Spot gold rose 0.8% to $2,434.31 an ounce.
This article was produced with assistance from Bloomberg Automation.
–With assistance from Richard Henderson, Matthew Burgess, Hideyuki Sano and Catherine Bosley.
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