Stocks Rise as Traders Seek Rate Clues From Powell: Markets Wrap

(Bloomberg) — Stocks rose after a two-day selloff, as traders waited to see if Federal Reserve Chair Jerome Powell will continue to push back against the prospect of speedy interest-rate cuts.

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Contracts on the Nasdaq 100 added 0.7% while the S&P 500 ticked up 0.4%. In premarket trading, cybersecurity firm CrowdStrike Holdings Inc. soared 25% after forecast-beating results, its results also lifting peers such as Palo Alto Networks Inc. and Zscaler Inc. Cryptocurrency-linked stocks rallied, spurred by a rebound in Bitcoin, and Tesla Inc. also bounced after dropping more than 10% in the first two days of the week.

Europe’s Stoxx 600 rose 0.2%, benefiting also from China’s pledge to deploy vigorous measures to keep its economy growing. Travel stocks were among the gainers after analysts upgraded TUI AG and British Airways-owner IAG SA. Britain’s domestically oriented FTSE 250 benchmark rose 0.8% ahead of the spring budget, which is expected to deliver a cut to national insurance payroll tax.

Attention later will be firmly on Powell’s semiannual testimony before Congress. He is widely expected to reiterate the message that the US central bank does not see an urgent need for rate cuts, given robust economic data in recent months. A meeting of the European Central Bank is due Thursday, followed by monthly US payrolls data on Friday.

“The market is certainly not expecting a breakthrough from Powell, the ECB or Friday’s job data,” said Francois Rimeu, a strategist at La Francaise Asset Management in Paris.

Rimeu predicted this year’s equity gains will extend, with many investors fearful of missing out on the rally. The S&P 500 hasn’t suffered a drop of 2% or more in one day since February 2023, the longest run without such pullback in six years.

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“I expect many investors late on the rally will buy the dips along the way,” he said.

Earlier in the day, Hong Kong shares rebounded and Chinese government bonds rose as China vowed steps to defend its 5% growth target for this year and the central bank hinted it was ready to cut interest rates.

The yen rose versus the dollar, and global bond yields edged higher on anticipation that Japan’s central bank will exit negative interest rates at its policy meeting this month. Mitsubishi UFJ Financial Group Inc said it is positioning for that outcome, a view supported by latest data showing inflation in Tokyo surged back above rate-setters’ target.

Meanwhile, Bitcoin was on the rise again after briefly hitting a record on Tuesday for the first time in more than two years. Gold steadied after also surging to a record in the previous session, when geopolitical tensions and rate-cut expectations pushed it higher. Brent crude futures traded above $82 a barrel following an OPEC+ decision to extend output cuts.

In emerging markets, the Egyptian pound plunged about 50% after the central bank devalued the currency for the fourth time since early 2022, following a massive interest-rate hike.

Key Events This Week:

• Canada rate decision, Wednesday

• Eurozone retail sales, Wednesday

• US ADP employment, JOLTS job openings, Wednesday

• Fed Chair Jerome Powell testifies before the House Financial Services Committee, Wednesday

• Fed issues Beige Book, Wednesday

• Fed’s Neel Kashkari (Minneapolis) and Mary Daly (San Francisco) speak, Wednesday

• China trade, forex reserves, Thursday

• European Central Bank’s rate decision, Thursday

• US initial jobless claims, trade, Thursday

• President Joe Biden delivers the State of the Union address, Thursday

• Fed Chair Jerome Powell testifies before the Senate Banking Committee, Thursday

• Cleveland Fed President Loretta Mester speaks, Thursday

• Eurozone GDP, Friday

• US nonfarm payrolls, unemployment, Friday

• New York Fed President John Williams speaks, Friday

• ECB Governing Council member Robert Holzmann speaks, Friday

Some of the main moves in markets:

Stocks

• The Stoxx Europe 600 rose 0.2% as of 10:53 a.m. London time

• S&P 500 futures rose 0.3%

• Nasdaq 100 futures rose 0.7%

• Futures on the Dow Jones Industrial Average rose 0.2%

• The MSCI Asia Pacific Index rose 0.5%

• The MSCI Emerging Markets Index rose 0.6%

Currencies

• The Bloomberg Dollar Spot Index fell 0.1%

• The euro rose 0.2% to $1.0876

• The Japanese yen rose 0.2% to 149.77 per dollar

• The offshore yuan was little changed at 7.2176 per dollar

• The British pound rose 0.1% to $1.2720

Cryptocurrencies

• Bitcoin rose 5.3% to $66,668.74

• Ether rose 8.8% to $3,835.28

Bonds

• The yield on 10-year Treasuries was little changed at 4.16%

• Germany’s 10-year yield advanced three basis points to 2.36%

• Britain’s 10-year yield advanced four basis points to 4.05%

Commodities

• Brent crude rose 0.6% to $82.56 a barrel

• Spot gold fell 0.1% to $2,125.78 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from John Cheng, Richard Henderson and Winnie Hsu.

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