Traders work on the floor at the New York Stock Exchange. — Reuters pic
NEW YORK, July 13 ― Wall Street stocks closed higher and the dollar fell yesterday as investors prepared for a US interest-rate cut, while oil futures were little changed as a forecast for a global crude surplus offset worries about US output declines due to a tropical storm.
The US Treasuries yield curve steepened slightly, with yields largely unmoved by stronger-than-expected producer price data. Market expectations of an interest rate cut in July held firm after two days of testimony from Federal Reserve Chair Jerome Powell.
Wall Street’s benchmark, the S&P 500, and the Dow Jones Industrial Average rose modestly a day after hitting record highs.
Since Powell reinforced expectations of a July rate cut that fed a recent rally, the market is “churning before it makes the next move” during quarterly earnings season that kicks off next week, said Ken Polcari, managing principal at Butcher Joseph Asset Management in New York.
Polcari said improving economic data is making investors cautious over the Fed’s rate path.
“Now there’s a little trepidation that if the data is coming in strong why are we cutting rates?” he said. “The market’s thinking he’s going to cut rates in July and then that’ll be it.”
The Dow Jones Industrial Average rose 243.95 points, or 0.9 per cent, to 27,332.03, the S&P 500 gained 13.86 points, or 0.46 per cent, to 3,013.77 and the Nasdaq Composite added 48.10 points, or 0.59 per cent, to 8,244.14.
All three stock indexes registered their second weekly advance in a row ahead of the start of second-quarter corporate earnings season. Analysts are forecasting a decline in S&P 500 earnings per share of 0.4 per cent for the quarter, according to I/B/E/S data from Refinitiv.