US Stocks Surge as CME Trading Restarts, Fed Rate-Cut Hopes Steady
US stocks experienced an increase on Friday, marking the fifth consecutive session of gains, as the Chicago Mercantile Exchange resumed operations after a prior outage. Traders maintained their optimism regarding a potential interest-rate cut by the Federal Reserve next month. The S&P 500 Index rose 0.2 percent at 7:12 a.m. in New York, moving closer to its largest weekly gain since June. The Nasdaq 100 Index, which is heavily weighted towards technology, saw an increase of 0.3 percent. The Cboe Volatility Index remained steady at approximately 17. The Chicago Mercantile Exchange has resumed most trading operations following a prolonged technical outage that significantly impacted essential segments of the financial markets. The exchange’s Globex Futures & Options market commenced operations at 8:30 a.m., whereas CME Direct remained inaccessible.
“The stock market is always quiet and illiquid on the day after Thanksgiving,” stated Matt Maley “With the issues the CME is dealing with, investors will be even more likely to sit on their hands today. So, it will be difficult to draw any conclusions from today’s action.” Most US markets are beginning to reopen for a shortened trading session after the Thanksgiving holiday. On Friday, news will be sparse, as there is no economic data set for release and no scheduled speakers from the Fed due to the impending blackout period before December’s interest-rate decision. Markets are persistently wagering that the central bank will reduce its benchmark next month. Swaps data indicates that traders have factored in nearly a complete quarter-point reduction since last week, following remarks from New York Fed President John Williams, who noted the potential for rate cuts in the near future due to labor-market softness.
According to Brian Jacobsen, markets appear to be primarily influenced by shifts in expectations surrounding monetary policy. “Would a 0.25 percentage point reduction in the federal funds rate make a significant difference? Not by itself, but it carries important signaling value,” Jacobsen said. “A cut could indicate not only that the Fed recognizes signs of a softening labor market, but — more importantly — that it is prepared to act in response.” Economic data releases — both delayed and fresh — have provided traders with a clearer insight into the strength of the consumer and the labor market. However, Miller Tabak’s Maley states that investors are likely to seek additional information before solidifying their perspectives. Maley stated that they “will likely want to get a better idea of how Black Friday does before they act on anything they learn about the consumer too quickly.”
CNH Industrial NV experienced a decline following JPMorgan’s decision to downgrade the agricultural equipment manufacturer to underweight from neutral, referencing the industry outlook of Deere Co. Tilray Brands Inc. experienced a decline following the announcement of a one-for-10 reverse stock split of its common stock.
