Following the US April nonfarm payrolls report last week that rekindled market expectations for rate cuts, investors on Monday continued to assess the monetary policy signals sent by Fed officials' speeches. On the day, some regional Fed presidents expressed optimism about the trend of inflation decline, solidifying market expectations that the Fed could start cutting rates as early as the third quarter, with US tech stocks continuing to lead gains, and all three major US stock indices closing higher. By the close, the Dow was up 0.46%, the S&P 500 was up 1.03%, and the Nasdaq was up 1.19%. Of the S&P 11 sectors, only the real estate sector closed lower on Monday, with the information technology sector, led by chip stocks, up nearly 1.5%. Among individual stocks, Nvidia closed up 3.77%, leading the gains among the seven major US tech giants.
ECB officials optimistic about inflation decline prospects
On Monday, several ECB officials said in public statements that they were optimistic about the outlook for a decline in overall eurozone inflation. A series of recent data has reinforced their confidence that eurozone inflation will fall back to 2% by the middle of next year. These comments solidified market expectations that the ECB will start cutting rates ahead of the Fed, coupled with the release of the eurozone's April composite purchasing managers' index (PMI), which rose to 51.7, a new high in nearly a year. By the close, French stocks were up 0.49% and German stocks were up 0.96%.
International oil prices rise on Monday
In oil futures, Saudi Arabia on Monday decided to raise prices for its flagship crude product exports to Asia for the third consecutive month. Later in the day, the ceasefire agreement between Israel and the Palestinians took another turn, with Israel's war cabinet deciding to invade the southernmost Palestinian city of Rafah in the Gaza Strip in a few days.
These factors pushed international oil prices up more than 1% at one point during the day, but narrowed as the dollar index rebounded, and international oil prices closed slightly higher. By the close, New York Mercantile Exchange June light sweet crude futures settled at $78.48 per barrel, up 0.47%, and London Brent crude futures settled at $83.33 per barrel, up 0.45%.
International gold prices rise nearly 1% on Monday
A combination of factors pushed international gold prices higher on Monday. The market further solidified expectations that the Fed could start cutting rates as early as the third quarter of this year, and Israel's decision to launch a new round of attacks on Palestine has fueled risk aversion among investors, pushing international gold prices up nearly 1%. By the close, New York Mercantile Exchange gold futures market June gold futures settled at $2,331.2 per ounce, up 0.98%.
