Fed commentary leads market to new highs

The S&P 500 & Nasdaq both closed at new records following encouraging commentary from Federal Reserve Chairman, Jerome Powell.

The S&P 500 just managed to close in the green adding 0.07 per cent to a record 5,576. The Nasdaq closed 0.14 per cent higher also closing at a new record 18,429. Both major indexes also touched fresh all-time highs during the session. The Dow Jones again bucked the trend by closing in the red, finishing 0.13 per cent lower.

The key driver on the day was commentary from Fed Chair Jerome Powell, who said “Reducing policy restraint too late or too little could unduly weaken economic activity and employment,”. Powell also went on to say “More good data would strengthen our confidence that inflation is moving sustainably toward 2 percent.” Investors took these comments as a clear signal the Fed remains focused on delivering the highly anticipated easing of policy sooner rather than later. Powell will continue his testimony before Congress on Wednesday.

The Fed commentary highlights the importance of key inflation data due later this week, with the June consumer price index due on Thursday and the producer price index on Friday.

In company news, Nvidia shares rallied 2.5 per cent after broker KeyBanc upgraded its price target on the AI giant to $180, which implies upside of 40 per cent from current share price levels. Tesla continued its recovery closing up 3.7 per cent on the day. Apple closed 0.4 per cent higher, lifting its market cap to US$3.51 trillion. Microsoft bucked the tech trend closing down 1.4 per cent on the day.

Turning to US sectors, the best performer was Financials which closed 0.65 per cent higher. The worst performer was Materials which finished 1.01 per cent lower.

In local and Asian news, the RBNZ will deliver its policy decision today, and China is expected to release its June CPI & PPI numbers later in the day.

Futures

The SPI futures are pointing to a 0.5 per cent fall.

Currency

One Australian dollar at 7.30am was buying 67.41 US cents.

Commodities

Gold has added 0.19 per cent. Silver has gained 0.46 per cent. Copper has fallen 0.88 per cent. Oil has droppedl 1.12 per cent.

Figures around the globe

European markets closed lower. London’s FTSE fell 0.66 per cent, Frankfurt lost 1.28 per cent, and Paris closed 1.56 per cent lower.

Turning to Asian markets, Tokyo’s Nikkei gained 1.96 per cent, Hong Kong’s Hang Seng closed flat while China’s Shanghai Composite closed 1.26 per cent higher.

Yesterday, the Australian share market closed 0.86 per cent higher at 7,829.71.

Ex-dividends
CD Equity Fund II (ASX:CD2) is paying 7 cents unfranked
CD Equity Fund III (ASX:CD3) is paying 7 cents unfranked

Dividends payable
Fisher & Paykel Healthcare Corp Ltd (ASX:FPH)

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.

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