Market Optimism Soars Ahead of Inflation Data
As the US celebrates Veterans Day, stock futures are pointing to a strong open, building on last week’s record-breaking rally. The Dow Jones Industrial Average and S&P 500 futures are up around 0.4% and 0.3%, respectively, while the tech-heavy Nasdaq 100 futures have added about 0.3%. This surge in optimism is largely driven by expectations of lower corporate taxes and deregulation under President-elect Donald Trump’s administration.
Fed Rate Cut Boosts Market Confidence
The Federal Reserve’s latest interest-rate cut has also contributed to the market’s buoyant mood. However, some experts are starting to question the sustainability of this rally. The next key indicator will be the October consumer inflation data, set to be released on Wednesday, which will provide insight into the path of interest rates. Chair Jerome Powell has remained tight-lipped on the Fed’s stance regarding Trump’s policies, which could impact inflation.
Tariffs and Inflation Concerns
One major concern is that Trump’s proposed tariffs could lead to higher inflation, prompting the Fed to reassess its rate-cut strategy. Minneapolis Fed President Neel Kashkari has cautioned that an escalating trade war could have significant implications for policymakers. As a result, traders are now predicting a 68% chance of another quarter percentage point rate cut in December, down from almost 80% last week.
Crypto and Tesla Stocks Soar
In other news, bitcoin has surged to an all-time high of over $82,000, driven by hopes of a crypto-friendly Trump administration and Congress. Smaller digital currencies like dogecoin have also seen significant gains. Meanwhile, Tesla shares have continued their upward trajectory, rising nearly 7% in premarket trading. The electric vehicle maker’s stock hit its highest close in over two years on Friday, topping $1 trillion in market value, amid optimism over CEO Elon Musk’s relationship with the incoming president.
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