S&P 500 is on a tear as investors see September rate cuts as likely

Wall Street is getting a record rally: The S&P 500 hit another record high at the close of trading yesterday, marking the 37th record high since the beginning of the year and the sixth consecutive record close for the index. Yesterday’s record performance was buoyed by chip stocks, which were “outperformers” in the trading day, as Taiwan Semiconductor rallied after it released earnings that were better than expected. Nvidia closed up nearly 3%, while Apple shares also jumped on news that it plans to ramp up its iPhone shipments.

What’s driving the rally? Investors are looking more confident that the US Federal Reserve will move to cut interest rates in the next few months, after Fed Chair Jerome Powell testified to Congress on Tuesday that he has “some confidence” that inflation will cool to 2%. Powell also told Congress that the Fed doesn’t necessarily need to wait for inflation to fall to 2% before moving on interest rate cuts, which signaled to investors that a September rate cut could be in the cards.

Wall Street will be watching for inflation figures being released later this evening and tomorrow for more signs on where the Fed is heading. The US will release CPI data today, while producer price index figures are expected to be released tomorrow. (Financial Times | CNBC | Reuters)

MARKETS THIS MORNING-

Asian markets are in the green this morning, driven by the US tech rally and hopes for a Fed rate cut. The Nikkei is up 0.97%, while the broad based Topix is up 0.7%, both notching fresh highs. Meanwhile, Wall Street futures are little changed, while European markets are heading for a strong open.

TASI	11,784	0.0% (YTD: -1.5%)
MSCI Tadawul 30	1,472	0.0% (YTD: -5.1%)
NomuC	25,517	-0.2% (YTD: +4.0%)
USD : SAR (SAMA)	USD 3.75 Sell	USD 3.75 Buy
Interest rates	6% repo	5.5% reverse repo
EGX30	28,288.	-0.6% (YTD: +13.6%)
ADX	9,138	0.0% (YTD: -4.7%)
DFM	4,080	+0.1% (YTD: +0.5%)
S&P 500	5,634	+1.0% (YTD: +18.1%)
FTSE 100	8,194	+0.7% (YTD: +6.0%)
Euro Stoxx 50	4,959	+1.1% (YTD: +9.7%)
Brent crude	USD 85.35	+0.8%
Natural gas (Nymex)	USD 2.33	-0.6%
Gold	USD 2,379.70	+0.5%
BTC	58,261.35	0.9% (YTD: +31.9%)

THE CLOSING BELL: TADAWUL-

The TASI was flat yesterday on turnover of SAR 5.2 bn. The index is down 1.5% YTD.

In the green: Al Baha (+8.3%), Miahona (+7.5%) and AlKathiri (+6.3%).

In the red: Medgulf (-5.8%), Saudi Re (-2.4%) and Zamil Industrial (-1.9%).

THE CLOSING BELL: NOMU-

The NomuC fell 0.2% yesterday on turnover of SAR 24.2 mn. The index is up 4.0% YTD.

In the green: Ghida Al Sultan (+7.4%), Azm (+5.9%) and Armah (+4.7%).

In the red: Leaf (-14.7%), Saudi Top (-9.7%) and Naba Alsaha (-5.7%)

CORPORATE ACTIONS-

Alinma Hospitality will distribute SAR 32.6 mn in dividends to all unitholders of its Alinma Hospitality REIT Fund for 1H 2024, it said in a disclosure to Tadawul. Distribution will be completed within 15 working days of the eligibility date which was set for Monday, 22 July.