Stocks and US equity futures rose Friday as investors assessed whether signs of cooling inflation will enable the Federal Reserve to pivot to less aggressive interest-rate increases.
Traders have pared back bets on Fed rate hikes after a report on Thursday showed US producer prices fell in July from a month earlier for the first time in over two years. That added to Wednesday’s data on slower increases in consumer prices to provide signs of cooling but still troubling inflation.
A dollar gauge headed for its deepest weekly drop since May. Treasuries steadied. Gold headed for a fourth weekly gain and Bitcoin slipped to trade near the US$24,000 level. Bank of America Corp. says investors are rushing back into stocks and bonds. Global equity funds pulled in US$7.1 billion in the week through Aug. 10, strategists led by Michael Hartnett wrote in a note, citing EPFR Global data. US stocks saw inflows of US$11 billion, the biggest in eight weeks.
2 more aggressive hikes would be ideal, rip the bandaid off and get pivoting in 2023