US Futures Soar as New Quarter Begins on a Positive Note

US Futures Soar as New Quarter Begins on a Positive Note

US stocks looked set to kick off 2024’s second quarter on a high note Monday as investors looked to softening in the Federal Reserve’s preferred inflation gauge as a sign of a coming interest rate cut this quarter.

Futures tied to the S&P 500 (^GSPC) and the Dow Jones Industrial Average (^DJI) rose around 0.3%. The blue-chip Dow Jones was eyeing the key 40,000 mark. Those tied to the tech-heavy Nasdaq Composite (^IXIC) led the gains, rising about 0.4%.

Wall Street has begun 2024 on a high note: The benchmark S&P 500 has set 22 fresh closing records so far this year as part of its best first quarter since 2019. Meanwhile, all three major averages have now risen for five straight months.

Markets were closed Friday, but the week’s data highlight — the Personal Consumption Expenditures price index — served to boost hopes of rate cuts this year. That index contains “core” PCE, the Fed’s preferred inflation gauge. The report showed core PCE rose 0.3% month over month, below economist expectations. Fed Chair Jerome Powell said Friday that the data was “along the lines” of what the Fed is looking for.

The data has given a boost to investor bets on a June rate cut. According to the CME FedWatch tool, around two-thirds of investors are pricing in a cut at the Fed’s June meeting, compared with about 55% last Thursday.

The highlight of Q2’s first week on the macroeconomic front is Friday’s jobs report, which will serve as another important signal to the Fed.

Live1 update

  • Inside the markets to kick off April

    April 8 is total solar eclipse day. You may also need a pair of sunglasses when looking at how markets and certain stocks will start in April.

    A little data analysis from yours truly (hat tip to Yahoo Finance’s Jared Blikre for the stats):

    • S&P 500 is the best-performing major US index year to date, up 10.16% (only major index to be up double-digits).

    • Four well-known ETFs are up double-digits year to date: energy (XLE), financials (XLF), industrials (XLI), communications services (XLC). Energy is the best-performer, tracking the renewed move higher in oil prices.

    • The main real estate ETF Real Estate Select Sector SPDR Fund (XLRE) is down 1.3% year to date, one of the worst performers despite the prospect of lower interest rates at some point this year.

    • Two of the Magnificent 7 (Tesla TSLA /Apple AAPL) are down double-digit percentages year to date.

    • Best Dow performer year to date: Disney (DIS). +35% and hovering at a record high ahead of this week’s showdown between Disney CEO Bob Iger and activist Nelson Peltz. More on that from Yahoo Finance’s Alexandra Canal here.

    • Worst Dow performer year to date: Boeing (BA), -25%. No surprise here.

    • Best-performing Nasdaq 100 stock not named Nvidia (NVDA): Constellation Energy (CEG) +58%. Interesting.

    • Worst-performing Nasdaq 100 stock not named Tesla: Sirius (SIRI) -29%, despite a major rebrand last fall designed to improve the narrative amongst investors.

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