S&P 500, gold make fresh highs after confident Powell, lower inflation rate

Data current as of 4/1/2024

Key points

• S&P 500 hit new highs near $5,300: (0:47)
• Gold price nears new high $2,300: (3:29)
• Powell says, "US economy is growing at such a solid pace": (4:54)
• US inflation rate lowest since March 2021: (7:11)
• US dollar appreciates to recent highs on relative strength: (8:59)

S&P 500 hit new highs near $5,300

The S&P 500 has soared to near-record levels, approaching $5,300, buoyed by robust US economic data that has instilled a bullish sentiment among investors as they enter April. This optimistic outlook is reflective of the strong financial performances and earnings growth observed across major sectors, as well as expectations of lowering inflation.

Gold price nears new high $2,300

Similarly, Gold futures have surged almost $100 in the past week, hitting all-time highs near $2,300. This rally in gold prices is indicative of the metal's status as a safe haven amid current economic uncertainties. As investors seek stability, gold's ascent speaks to the broader search for assets that can hedge against potential market volatilities. Though historically more range-bound, in recent months gold prices have not only moved comfortably through $2,000 for the first time, but $2,100 as well.

Powell says, "US economy is growing at such a solid pace"

Federal Reserve Chair Jerome Powell highlighted the robust growth of the US economy in recent comments, emphasizing the Fed's hesitancy to implement rate cuts due to this strength. Powell’s remarks underline confidence in the ongoing economic recovery, suggesting a cautious approach to monetary policy adjustments moving forward. While still forecasting three rate cuts this year, investors are now led to believe they could begin later in the year.

US inflation rate lowest since March 2021

Friday's report shows the Core Personal Consumption Expenditures (PCE) inflation rate has fallen to 2.8% in February, marking its lowest point in nearly three years. This 0.1% decrease from January is reassuring to the Fed as it builds confidence that inflation is unlikely to make an unexpected drop through 2%.

US dollar appreciates to recent highs on relative strength

The US dollar has appreciated to recent highs, bolstered by signs from the European Central Bank (ECB) that rate cuts may occur "before the US" This dynamic demonstrates the dollar's relative strength against a backdrop of global monetary policy shifts, impacting forex markets and international trading strategies.

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