The futures contracts for US stocks rose on Thursday after stocks reached a record high in the previous session following a moderate monthly inflation report. Wednesday’s data showed that consumer price growth had slowed as expected to 3.4% on an annual basis in April, boosting bets that the Federal Reserve would begin cutting interest rates from their highest levels in over two decades later this year. Traders have now priced in two cuts in 2024, up from just one earlier this week.
Stocks rose following the report, with the S&P 500 index up by 1.2%, the Nasdaq Composite index, which is dominated by technology stocks, up by 1.4%, and the Dow Jones Industrial Average, consisting of 30 stocks, up by 0.9%. The yield on two-year US Treasury bonds touched its lowest level since early April, while the dollar weakened to its lowest levels in several weeks against its counterparts.
On another note, Bitcoin rose on Thursday, supported by the dollar’s decline, although sentiment towards cryptocurrencies is weak. The world’s largest cryptocurrency rose by 6.7% over the past 24 hours to reach $66,805 before losing some momentum. It had dropped to a low of $60,000 earlier this week.
Analysts pointed out that the pace of inflation on an annual basis remains significantly higher than the Federal Reserve’s target level of 2%, while a significant number of central bank officials have recently warned that they would need more confidence that prices are declining sustainably before cutting interest rates.
This idea has tempered any significant gains in Bitcoin, keeping trading comfortably within a range of $60,000 to $70,000 set over the past two months. This performance also comes amid a slowdown in capital inflows and trading activity in exchange-traded funds, which was a major driver of Bitcoin’s rise in March, particularly in recent weeks.
