The S&P 500 (SPX) continued to rally last week as risk assets have surged since yields on U.S. Treasuries started to drop in late October. The index closed 2.2% higher last week to secure the first close above 4,500 since August.
Stocks are in a rallying mood on hopes the Federal Reserve might resort to cutting interest rates as inflation shows signs of cooling. The softer-than-expected October CPI prompted markets to nearly fully price out additional Fed hikes.
The S&P 500 achieved its third consecutive week of gains, marking its lengthiest weekly winning streak since July.
Last week, Federal Reserve Vice Chair for Supervision, Michael Barr, reiterated the likelihood that officials are either at or close to concluding their tightening measures. However, Federal Reserve Bank of San Francisco President, Mary Daly, expressed uncertainty among policymakers regarding whether inflation is progressing toward their 2% target.
Nasdaq Composite Index (IXIC) added 2.4% while the Dow Jones Industrial Average (DJI) closed 1.9% higher.
Nvidia (NASDAQ:NVDA) takes the center stage
For this week, investors will be watching closely the November FOMC meeting minutes, which are out on Wednesday.
“The Fed now has diminishing returns on hawkish rhetoric, given that it has been on hold since July. One point of interest in the minutes will be any discussion of the nature and impact of financial tightening whether it was exogenous or not to Fed expectations,” said analysts at Bank of America.
On the earnings front, the highlight will be Nvidia (NVDA), which reports on Tuesday after market close. On Monday, Zoom Video (NASDAQ:ZM) is due to report. Other notable reporters include Lowe’s (NYSE:LOW), Medtronic (NYSE:MDT), Analog DevicesRead more on investing.com