S&P 500 jumps as Treasury yields remain steady on easing bets of November hike
Investing.com — The S&P 500 jumped Tuesday as investors continued to digest remarks from Federal Reserve officials hinting at another pause on rate hikes next month.
The S&P 500 rose 0.7%, the Dow Jones Industrial Average rose 0.6%, 185 points, Nasdaq gained 0.8%.
Atlanta Federal Reserve President Raphel Bostic added to expectations that the Fed will hold rates steady next month, saying “a lot” of the 11-rate hikes delivered since March 2022 are yet to filter through the economy.
«I actually don't think we need to increase rates anymore» to get too-high inflation back down to the Fed's 2% goal," Bostic told the American Bankers Association on Tuesday.
About 13% of traders expect the Fed to hike in November, down from 31% last week, according to Investing.com's Fed Rate Monitor Tool.
The remarks from Bostic echo those from Fed Vice Chair Philip Jefferson and Dallas Fed president Lorie Logan, who a day earlier, signaled that the recent surge in Treasury yields, particularly at the long-end of the yield curve, had tightened financial conditions and could help restrict growth and inflation.
The key part of Treasury yield curve continue to unwind its inversion amid easing recession fears, with the 2-year rate over the 10-year Treasury rate narrowing to -29 basis points, the lowest level since March and well above the trough of -106 bps seen in the summer.
Microsoft Corporation (NASDAQ:MSFT) gave up gains despite Morgan Stanley reiterating the tech giant remains a top pick amid optimism over its strength in its artificial intelligence, cybersecurity, and cloud businesses.
Palantir Technologies Inc (NYSE:PLTR) gained more than 1% after the data software won a new contract from the U.S. Army worth about $250 million.
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