Investing.com– The S&P 500 started the week on the front foot Monday as revived hopes for a September Federal Reserve interest rate cut triggered a sea of green across Wall Street.
At 16:00 ET (20:00 GMT), the benchmark S&P 500 was up 1%, the tech-heavy Nasdaq Composite rose 1.2%, and the 30-stock Dow Jones Industrial Average was up 176 points or 0.5%.
Rate-cut bets continue rise after April nonfarm payroll
Hopes for a September rate cut were revived following the softer-than-projected nonfarm payrolls data on Friday that signaled a cooling the labor market was cooling, easing fears about wage-growth-led inflation.
Traders are now wagering that the central bank will begin trimming rates as soon as September, but still maintained only around a 44% probability of such a scenario, according to the CME Fedwatch tool. Bets had previously seen the initial cut coming in November.
Fed officials, who are set to deliver a slew of remarks this week, acknowledged the slowing job growth and signaled that the next Fed move will likely be a cut rather than a hike.
Richmond Fed president Richard Barkin said he believes that the current policy is restrictive, though signal that the recent data had knocked confidence on how quickly the central bank can bring down in inflation toward its 2% target.
New York Fed president John Williams said Monday that eventually there will be rate cuts, though cautioned that the recent trade upside surprise in the inflation data was a worry for the central bank.
Gaza ceasefire deal uncertain as Israel reportedly signals unwillingness to accept ‘softened’ agreement
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Hamas reportedly accepted the terms of a ceasefire deal brokered by Egypt and Qatari, but an Israeli official told Reuters that the deal was a “softened” version of an earlier Egyptian proposal.
The official further told Reuters that the Hamas’ announcement “appears to be a ruse to cast Israel as the side refusing a deal.”
The Israeli official said the deal included outcomes that it had not agreed to, stoking uncertainty about whether Tel Aviv will ok the deal to temporarily end the months-long war in Gaza.
Earnings season continues; Spirit slips on wider loss
Spirit Airlines Inc (NYSE:SAVE) fell 10% after reporting a wider than expected Q1 loss and weaker guidance as the airline carrier flagged the impact of the grounding of a number of its aircraft due to ongoing issues with Pratt & Whitney Geared Turbofan engines.
Ride-sharing group Uber Technologies (NYSE:UBER) and entertainment giant Walt Disney (NYSE:DIS) will continue earnings for major large-cap companies with results due later this week.
Warren Buffett’s Berkshire Hathaway B (NYSE:BRKb) was up 1% after reporting a quarterly results over the weekend that included a 40% jump in Q1 operating earnings from a year earlier.
Chips stocks get Micron, Super Micro boost
Super Micro Computer Inc (NASDAQ:SMCI) and Micron Technology Inc (NASDAQ:MU) rose more than 6% and 4%, respectively, helping to lift the broader semiconductor sector.
Baird upgraded Micron to outperform from buy, and hiked its price target on the stock to $150 from $115, citing “meaningful upside opportunities ahead.”
(Scott Kanowsky contributed to this report.)
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