U.S. stocks edge higher on hopes of Fed ending rate hikes

Wall Street stocks opened cautiously higher Friday as investors drew optimism from signs of a cooling U.S. economy and raised hopes that the U.S. Federal Reserve would soon end its rate hike policy. rice field.

Wall Street’s benchmark S&P 500 rose 0.2% at the opening bell, but the Nasdaq Composite fell 0.1% as shares of tech-heavy stocks Apple and Microsoft fell 0.4% and 0.7%, respectively.

Investors have embraced the combination, taking it as a sign the Fed may need to cut back on rate hikes to keep inflation in check after economic data showed a softening labor market and subdued consumer spending. reached all-time highs overnight.

Still, the Fed hinted this week that more rate hikes could come later in the year. When policymakers met earlier this week, the central bank kept the federal funds rate unchanged at its target range of 5-5.25%.

“Markets and the Federal Reserve are going in different directions about where the economy is headed,” said James Knightley, chief international economist at ING. “Futures contract [are] The Fed has not fully discounted even one rate hike, let alone the two rate hikes currently planned,” he said.

Investors have priced in a 72% chance that the Fed will raise rates by another 15% at its next policy meeting in July, according to data compiled by Refinitiv based on interest rate derivative prices.

Two-year Treasury yields rose 0.1 percentage points to 4.75% on Friday. The benchmark 10-year yield rose 0.05 percentage points to 3.78%. Yields on bonds rise when prices fall.

The yen and pound rose against the dollar, with the yen rising to 141 yen, its highest since November, and the pound to 1.28, its highest since April last year.

Meanwhile, the European region-wide Stoxx 600 index was up 0.5%, France’s Cac 40 index was up 1.3%, and London’s FTSE 100 index was up 0.3%.

On Thursday, the European Central Bank made a more hawkish move than the Fed, raising the deposit rate by 0.25 percentage points to 3.5%. Highest level since July 2001.

The ECB has signaled further monetary tightening and said inflation would not return to its 2% target for the next two years.

Japan’s TOPIX index rose 0.3 percentage points as the Bank of Japan kept its overnight rate unchanged at -0.1% as expected, even as inflation beat the central bank’s 2% target.

The country’s benchmark 10-year bond yield has flattened out at 0.4% since the announcement, but the central bank said it would continue to allow 0.5 percentage points above or below its target yield of zero.

Elsewhere in Asia, China’s CSI300 index rose 1% and Hong Kong’s Hang Seng Index rose 1.1%. U.S. stocks edge higher on hopes of Fed ending rate hikes

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