Stocks Hold Gains as Powell Stokes Rate-Cut Bets: Markets Wrap

　　(Bloomberg) -- Stocks rose as traders prepare for the Federal Reserve to cut interest rates. US equity futures pointed to a sustained run for the S&P 500 after it hit its 36th record this year.

　　The Euro Stoxx 600 benchmark ticked higher, along with futures on the S&P 500 and Nasdaq 100, as traders parsed comments from Fed Chair Jerome Powell about the US economy. Swap traders continue to project two rate cuts in 2024.

　　Yields on two-year Treasuries traded near a three-month low, spurring a popular bet that the US yield curve will normalize toward a steeper slope. The idea behind the trade is that rate cuts, when they materialize, push down yields on short-term securities while fiscal spending drives up longer-dated yields.

　　“Were in position for curve steepeners,” Nicola Mai, sovereign credit analyst at Pimco, said in an interview with Bloomberg TV. “This year or early next year we should be getting to that disinversion of the curve for a couple of reasons. First of all rates should start to fall. Also I think the long end of the curve is going to remain high on fiscal concerns.”

　　The S&P 500 climbed for a sixth consecutive session on Tuesday, its longest winning streak since January, after Powell emphasized mounting signs of a cooling job market in remarks to lawmakers on Tuesday. The Nasdaq 100 also hit a record.

　　Further Congressional testimony by Powell on Wednesday, and key US inflation and jobs data tomorrow, may provide further clues on the policy path.

　　Among individual stock moves in Europe, Spanish utility Enagas SA climbed more than 4% after agreeing to sell its 30% stake in US pipeline firm Tallgrass Energy to Blackstone Infrastructure Partners.

　　In commodities, oil edged lower as concerns about Chinese demand and continued uncertainty over the timeline for Federal Reserve interest-rate cuts outweighed signs of another inventory draw in the US. Copper and iron ore declined, while gold was steady.

　　Key events this week:

• Jerome Powell testifies to the House Financial Services Committee, Wednesday
• Feds Austan Goolsbee, Michelle Bowman and Lisa Cook speak, Wednesday
• US CPI, initial jobless claims, Thursday
• Feds Raphael Bostic and Alberto Musalem speak, Thursday
• China trade, Friday
• University of Michigan consumer sentiment, US PPI, Friday
• Citigroup, JPMorgan and Wells Fargo earnings, Friday

　　Story continues

　　Some of the main moves in markets:

　　Stocks

• The Stoxx Europe 600 rose 0.3% as of 10:06 a.m. London time
• S&P 500 futures rose 0.1%
• Nasdaq 100 futures rose 0.2%
• Futures on the Dow Jones Industrial Average were little changed
• The MSCI Asia Pacific Index was little changed
• The MSCI Emerging Markets Index fell 0.2%

　　Currencies

• The Bloomberg Dollar Spot Index was little changed
• The euro was little changed at $1.0819
• The Japanese yen fell 0.1% to 161.55 per dollar
• The offshore yuan was little changed at 7.2926 per dollar
• The British pound rose 0.1% to $1.2799

　　Cryptocurrencies

• Bitcoin rose 1.3% to $58,668.86
• Ether rose 0.4% to $3,084.51

　　Bonds

• The yield on 10-year Treasuries declined one basis point to 4.29%
• Germanys 10-year yield declined four basis points to 2.54%
• Britains 10-year yield declined four basis points to 4.12%

　　Commodities

• Brent crude rose 0.2% to $84.80 a barrel
• Spot gold rose 0.4% to $2,372.46 an ounce