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Our team compiles this daily market report from global sources to highlight key market updates and what they mean for your investment portfolio.
Dow Jones S&P-500 Nasdaq
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The Update: The S&P 500 and Nasdaq closed at record highs on Tuesday, buoyed by Nvidia's continued surge to new peaks, while the Dow ended barely higher in subdued pre-holiday trading following softer-than-expected U.S. retail sales data. Nvidia overtook Microsoft to become the world's most valuable company, ending the day with a market capitalization of $3.22 trillion. In economic data, retail sales rose 0.1% in May, versus the 0.3% growth forecast by economists polled by Reuters, while another report showed surprisingly strong May industrial production and manufacturing output. Source: Reuters
The Impact: Following the economic news, markets slightly increased bets on two Federal Reserve interest rate cuts this year. Fed officials' comments overnight offered little to shift market pricing for cuts. US government bond yields dipped on Tuesday after the data kept the US Federal Reserve on track to lower interest rates this year. New York Fed President John Williams said interest rates will come down gradually over time, while Richmond Fed's Thomas Barkin said he required more months of economic data before supporting a rate cut. The US 10-year Treasury yield slid 5 points to 4.22% and the US 2-year Treasury yield fell 4 points to 4.72%. Source: Reuters, CommSec
European stocks closed higher Tuesday after a mixed start to the trading week. The Stoxx 600 index provisionally closed 0.66% higher, with most sectors and all major bourses trading in the green. Construction stocks led gains, up 1.3%, while household goods dipped 0.5%. Source: CNBC
Global oil prices settled more than 1% higher on Tuesday due to escalating tensions in Europe and the Middle East as wars in both regions continue to pose a threat to global supply. Prices rose following reports a Ukrainian drone strike caused a large fire in a fuel tank at an oil terminal in Russia's southern port of Azov. Source: CommSec
The ECB has taken the lead in being one of the first to cut interest rates and now attention turns to the Bank of England which will make a decision on rates this week. With an early election called and without a watertight case for cutting rates, the market is expecting another hold so as not to be seen as influencing the outcome of the election.
Attention now turns to the meeting in August where it is expected that the first rate cut will occur though it is not a sure thing. Inflation sits at 2.3% but there are pockets of sectors with very high inflation including annual wage growth and services inflation both around 6%.
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