- Stocks rose on Tuesday as traders waited for signs from the Federal Reserve that it will cut interest rates.
- While the Federal Open Market Committee isn’t expected to announce an immediate cut, it could signal its intention to lower rates later this year.
- A sharp decline in the Empire State Manufacturing Survey raised hopes the central bank would take action to boost the US economy.
- View Markets Insider’s homepage for more stories.
Stocks rose on Tuesday as traders waited for signs from this week’s Federal Reserve meeting that the central bank would cut interest rates.
The Federal Open Market Committee isn’t expected to announce an immediate cut when its meeting concludes on Wednesday, but it could signal its intention to cut rates later this year.
“This week’s FOMC meeting is the moment of truth for Fed watchers,” said Ipek Ozkardeskaya, senior market analyst at London Capital Group.
“A less dovish readjustment in the language could be a disappointment for the markets and send the US stock and bond markets tumbling,” she added. “Therefore, the Fed could choose to follow the market’s lead and deliver a sufficiently dovish verdict until the dust settles.”
Signs of economic weakness and rising global tensions have raised hopes the Fed will take action. The Empire State Manufacturing Survey, a gauge of business conditions for manufacturers in the New York area, slumped a record 26.4 points to -8.6 in June. Its last negative reading was in October 2016.
The Trump administration also ordered an additional 1,000 troops to the Middle East in response to “hostile behaviour” by Iran, which it has blamed for the recent attacks on two tankers in the Gulf of Oman. The Iranian government said it’s on track to exceed limits on its stockpile of enriched uranium before the end of this month.
Here’s the market roundup as of 9.15 a.m. (4.15 a.m.):
- Asian indexes climbed with the Shanghai Composite up 0.1%, the SZSE Component up 0.3%, and Hong Kong’s Hang Seng up 1%.
- European equities rose with the Euro Stoxx 50 and Britain’s FTSE 100 up 0.4%, and Germany’s DAX up 0.2%. Shares in Siltronic slumped 10% after the German wafer-maker warned the US-China trade war has been weighing on sales.
- US stocks are set to open higher. The futures underlying the Dow Jones Industrial Average and S&P 500 were up 0.2%, while Nasdaq futures were up about 0.4%.
- Crude oil prices dipped with West Texas Intermediate down 0.1% at $US52.10, and Brent crude down 0.3% at $US60.80.
- Bitcoin was down 0.5% at $US9,153. The cryptocurrency briefly passed the $US9,400 mark on Monday, a 13-month high.
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