US stocks opened the second quarter (Q2) of 2024 with a mixed tone on Monday, as investors parsed through indicators hinting at potential shifts in Federal Reserve policy. The S&P 500 (^GSPC) hovered around the flatline, while the Dow Jones Industrial Average (^DJI) experienced a slight decline of 0.4%. In contrast, the Nasdaq Composite (^IXIC) edged up by 0.4%.
This opening follows a strong start to the year, with the S&P 500 setting 22 new closing records in the first quarter, marking its most robust performance since 2019. Additionally, all three major indices have seen gains for five consecutive months, setting a positive tone for the market as it enters the second quarter.
While markets were closed on Friday, attention turned to the week’s key data release: the Personal Consumption Expenditures price index, including the “core” PCE, which serves as the Fed’s preferred measure of inflation. The latest report revealed a modest 0.3% month-over-month increase in core PCE, falling below economists’ expectations. Federal Reserve Chair Jerome Powell commented that the data aligned with the central bank’s objectives, sparking speculation of potential interest rate cuts in the near future.
Investor sentiment regarding a June rate cut received a notable boost, with approximately two-thirds of investors now pricing in the likelihood of a cut at the Fed’s upcoming meeting, compared to about 55% just last Thursday, as indicated by the CME FedWatch tool.
Gold (GC=F) reached fresh highs on Monday, building on its momentum from March’s record-breaking performances. Surging over 1%, precious metal futures soared to $2,265 per ounce, bolstered by investor anticipation of potential interest rate cuts by Fed officials later in the year.
Looking ahead, market participants are eagerly awaiting Friday’s jobs report, which promises to offer further insights into the state of the economy and potential future actions by the Federal Reserve.
The opening of the second quarter (Q2) saw US stocks mixed as investors closely monitor economic indicators and await further guidance from the Federal Reserve.
