Wall Street stocks rise before key rate decisions

March 18, 2024 09:16 PM

New York stocks climbed Monday at the start of a busy week of central bank meetings in the United States, Britain and Japan that should shed more light on the direction of interest rates.

Europe's main stock markets were little changed in afternoon trading while oil prices made modest gains after Ukraine again hit Russian oil refineries.

All eyes are on the US Federal Reserve, whose policy making committee meets this week and will announce any decisions Wednesday.

There are also rate calls this week from Reserve Bank of Australia, Bank of England, Bank of Japan and the Swiss National Bank.

The Fed isn't expected to alter its rates but it will release its latest so-called "dot plots" that lay out the central bank's interest rate forecasts.

At the moment, the chart points to three cuts this year, but recent hot inflation data could cut the number to two.

"On balance, the market still believes that the Fed will cut rates at its June meeting," said David Morrison, analyst at Trade Nation.

"But it’s quite possible that the ‘Dot Plot’ will indicate that FOMC members would prefer to push back the timing to September, given the recent uptick in inflation data. If so, that could be the catalyst for some profit-taking across equities," he said.

Apple is in talks to build Google's Gemini artificial intelligence engine into its iPhones, according to media reports. Apple shares were up more than 4 percent and Google's parent company Alphabet rose almost 13 percent.

The Bank of England is expected to stand pat Thursday irrespective of the latest UK inflation reading due the previous day.

Investors also have their eyes on a Bank of Japan (BoJ) decision Tuesday, with policymakers expected to finally ditch the bank's negative interest rate.

Japanese companies recently agreed to the largest pay increases in three decades, indicating less need for the long-standing loose policy to boost a flagging Japanese economy.

"These wage hikes may prompt the BoJ to reconsider its negative interest rate policy, especially if they contribute to achieving sustained inflation closer to the 2 percent target," said Fawad Razaqzada, analyst at City Index.

Asia's leading stock markets rose Monday after China posted stronger-than-expected industrial production data in what has so far been an uneven recovery for the world's second-largest economy.

Key figures around 1450 GMT

London - FTSE 100: DOWN less than 0.1 percent at 7,726.70 points

Paris - CAC 40: DOWN 0.2 percent at 8,148.46

Frankfurt - DAX: DOWN less than 0.1 percent at 17,930.38

EURO STOXX 50: FLAT at 0.3 percent at 4,986.15

New York - Dow: UP 0.2 percent at 38,783.28 points

New York - S&P 500: UP 0.9 percent at 5,161.78 points

New York - Nasdaq Composite: UP 1.4 percent at 16,200.33 points

Tokyo - Nikkei 225: UP 2.7 percent at 39,740.44 (close)

Hong Kong - Hang Seng Index: UP 0.1 percent at 16,737.12 (close)

Shanghai - Composite: UP 1.0 percent at 3,084.93 (close)

New York - Dow: DOWN 0.5 percent at 38,714.77 points