Stock market today: US stocks tick higher as Fedspeak, China stimulus lift spirits
09/24/2024 20:48
Investors are weighing the chances of another jumbo interest-rate cut and China's launch of aggressive stimulus.
US stocks picked up on Tuesday, extending a winning streak as pro-rate-cut Fedspeak and China's launch of aggressive stimulus lifted market spirits.
At the open, the tech-heavy Nasdaq Composite (^IXIC) popped about 0.5%, while the S&P 500 (^GSPC) rose more than 0.1%, building on its latest record close. The Dow Jones Industrial Average (^DJI) was up nearly 0.1%.
Stocks have shown momentum as the prospect of a Federal Reserve interest rate-cutting campaign and an apparently resilient economy spurs confidence in a coming rally. Some on Wall Street now forecast the S&P 500 will hit 6,000 this year — a big milestone less than 5% away.
The Fed's jumbo rate cut last week kicked off the rally, and on Monday, several policymakers hinted the door is open for more big moves. On Tuesday, Fed governor Michelle Bowman, explained she dissented to last week's half a percentage point interest rate cut because "upside risks to inflation remain prominent."
Read more: What the Fed rate cut means for bank accounts, CDs, loans, and credit cards
Also boosting the mood was China's launch of a raft of stimulus measures, its biggest since the pandemic. Global stocks and oil (CL=F, BZ=F) rallied after the PBOC's move to revive a slowing economy and support markets.
On the corporate front, beleaguered plane maker Boeing (BA) took what it called a "best and final offer" directly to striking factory workers after their union balked at putting it to a vote.
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Lone Fed dissenter worried bigger rate cut would send signal of 'economic fragility'
Federal Reserve governor Michelle Bowman, who was the lone dissenter of the Fed's 50 basis point interest rate cut last week, further explained her thinking in a speech on Tuesday.
Yahoo Finance's Jennifer Schonberger reports:
Bowman elaborated in a speech Tuesday about her decision to dissent from last week's jumbo rate cut, saying that she worried that a 50 basis point reduction would send the signal that central bank policymakers see economic weakness ahead.
"I was concerned that reducing the target range for the federal funds rate by 1/2 percentage point could be interpreted as a signal that the Committee sees some fragility or greater downside risks to the economy," Bowman said.
With no clear signs of material weakening or fragility, she added, it would have been better to cut by 25 basis points.
She also said she was worried a bigger first cut would lead markets to believe the Fed would cut at that pace going forward. Bringing the rate down too quickly also carries the risk of unleashing pent-up demand and "potentially reigniting inflationary pressures," she said.
China stocks rip at the open
Chinese equities sold in the US ripped higher at the open on Tuesday after China announced a widespread stimulus package.
Alibaba (BABA), Nio (NIO), JD.com (JD) and PDD Holdings (PDD) all soared in early trading, rising more than 5% each. KraneShares CSI China Internet ETF (KWEB) rose more than 7%.
Below is a look at how some of the largest Chinese stocks sold in the US are performing on Tuesday morning.
Source: Yahoo Finance US home prices notch another record high in July
US home prices hit a record high in July, but the pace of price increases moderated.
The S&P Case-Shiller National Home Price Index rose 0.2% over the prior month in July on a seasonally adjusted basis, unchanged from June’s monthly increase. This marked the sixth consecutive monthly increase and an all-time high for the index.
On an annual basis, prices increased 5.0%, down from the 5.5% gain seen in June.
The index tracking home prices in the 20 largest metropolitan areas gained 0.3% in July from June, lower than Bloomberg consensus estimate of 0.4% and June's 0.5%. The 20-city index jumped 5.9% compared to last July.
“Accounting for seasonality of home purchases, we have witnessed 14 consecutive record highs in our National Index,” Brian Luke, head of commodities, real & digital assets at S&P Dow Jones Indices, wrote in a statement.
“While the S&P 500 has achieved 39 record highs and the S&P GSCI Gold TR hit 35 record highs, housing is following a similar trajectory. The growth has come at a cost, with all but two markets decelerating last month, eight markets seeing monthly declines, and the slowest annual growth nationally in 2024. Overall, the indices continue to grow at a rate that exceeds long-run averages after accounting for inflation.”
Tech leads at the open
US stocks picked up on Tuesday, extending a winning streak as pro-rate-cut Fedspeak and China's launch of aggressive stimulus lifted market spirits.
Stocks initially rallied following the announcement before paring those gains. The tech-heavy Nasdaq Composite (^IXIC) popped about 0.5% while the S&P 500 (^GSPC) rose more than 0.1%. The Dow Jones Industrial Average (^DJI) was up nearly 0.1%.
China's CSI 300 Index has best day in more than four years
Chinese stocks and bonds rallied Tuesday as China's central bank unveiled its biggest stimulus package since the pandemic.
Govenor Pan Gongsheng announced plans to lower borrowing costs and inject further stimulus into the economy. In addition, the government will ease households' mortgage repayments.
China's benchmark index, the CSI 300 (000300.SS), rose more than 4.3% for its best day since July 2020.