S&P 500: Resilient as Fed tone turns dovish – Deutsche Bank
Deutsche Bank’s Early Morning Reid team reports that the S&P 500 broke a three-day losing streak, helped by a pullback in US Treasury yields and more dovish FOMC commentary. Despite strong US data and earlier upward pressure on yields, markets now price a much lower probability of an October Fed hike, supporting US equities into the upcoming jobs report.
Deutsche Bank's Early Morning Reid team highlights that the S&P 500 has broken a three-day losing streak, aided by a decline in US Treasury yields and more dovish Federal Reserve commentary. Despite positive US data, markets now view the likelihood of an October Fed hike as significantly lower, which supports US equities before the upcoming jobs report.
European assets faced challenges yesterday, but the situation in the US was markedly different. The S&P 500 (+0.19%) recovered from its previous three-day decline, with futures indicating a further +0.27% increase this morning. Consequently, the probability of an October Fed hike dropped to 30%, down from 37% on Wednesday and 70% on Monday, following similar remarks from NY Fed President Williams.
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