US Stocks Set to Test Another High Before Powell: Markets Wrap

(Bloomberg) — US stocks are set to scale yet another all-time high Tuesday as investors await Federal Reserve Chair Jerome Powell’s testimony to Congress for clues on the US interest-rate outlook.

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Futures on the S&P 500 gained after the benchmark set its 35th record for the year, with the second-quarter reporting season about to get underway. Contracts on the rate-sensitive Nasdaq 100 were also higher before Powell’s address. Treasuries and the dollar were steady.

Investors will be keying into any hints from the Fed chair about how soon policymakers will be in a position to cut interest rates. A long-awaited pivot to easier policy would provide investors sitting on a record $6 trillion of money-market with an incentive to buy bonds and other assets.

“Until they see the Fed truly cutting, there is a level of show-me,” said Anders Persson, chief investment officer at Nuveen. “There’s some skepticism about getting off the cash or money market investments that pay 5% and many retail investors are sitting on and enjoying.”

Markets are pricing the chance of two rate cuts this year, with a roughly 70% chance of the first in September, according to swaps data compiled by Bloomberg.

European stocks ticked lower as France’s CAC 40 lagged. Investors remain wary about increased government spending following the left’s resurgence in the weekend election, which produced a hung parliament.

Among individual stock movers, BP Plc fell more than 3% after saying it will take a hit of as much as $2 billion from impairments in second-quarter results. Dassault Systemes SE fell after cutting its full-year earnings forecast.

The US corporate earnings season kicks off on Friday with results from JPMorgan Chase & Co.

Key events this week:

• China aggregate financing, money supply, new yuan loans, from Tuesday

• Jerome Powell delivers semi-annual testimony to the Senate Banking Committee, Tuesday

• US Treasury Secretary Janet Yellen testifies to the House Financial Services Committee, Tuesday

• Fed’s Michael Barr and Michelle Bowman speak, Tuesday

• China PPI, CPI, Wednesday

• Jerome Powell testifies to the House Financial Services Committee, Wednesday

• Fed’s Austan Goolsbee, Michelle Bowman and Lisa Cook speak, Wednesday

• US CPI, initial jobless claims, Thursday

• Fed’s Raphael Bostic and Alberto Musalem speak, Thursday

• China trade, Friday

• University of Michigan consumer sentiment, US PPI, Friday

• Citigroup, JPMorgan and Wells Fargo’s earnings, Friday

Story continues

Some of the main moves in markets:

Stocks

• S&P 500 futures rose 0.2% as of 6:07 a.m. New York time

• Nasdaq 100 futures rose 0.4%

• Futures on the Dow Jones Industrial Average rose 0.1%

• The Stoxx Europe 600 fell 0.1%

• The MSCI World Index was little changed

Currencies

• The Bloomberg Dollar Spot Index was little changed

• The euro was little changed at $1.0822

• The British pound was little changed at $1.2810

• The Japanese yen fell 0.1% to 161.01 per dollar

Cryptocurrencies

• Bitcoin rose 2.5% to $57,640.01

• Ether rose 3.3% to $3,095.83

Bonds

• The yield on 10-year Treasuries was little changed at 4.28%

• Germany’s 10-year yield advanced three basis points to 2.57%

• Britain’s 10-year yield advanced three basis points to 4.15%

Commodities

• West Texas Intermediate crude fell 0.5% to $81.89 a barrel

• Spot gold rose 0.2% to $2,364.08 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Matthew Burgess and Aya Wagatsuma.

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