Investors are increasingly confident that the US Federal Reserve will slow the rate of interest rate hikes. ‘We will have a soft landing,’ said Neil Birrell at Premier Miton © Angela Weiss / AFP via Getty Images
US equities rallied on Monday, with investors increasingly confident the Federal Reserve will slow the pace of interest rate hikes when it meets next week.
Blue-chip Wall Street’s S&P 500 was 1.4 percent higher in afternoon trade, with all sectors in positive territory. Advanced Micro Devices, Qualcomm and Nvidia advanced 8.5 percent, 6.6 percent and 7.7 percent, respectively, after Barclays raised its price target for the semiconductor group.
The tech-heavy Nasdaq Composite has gained 2.1 percent. Spotify shares jumped as much as 6.4 per cent after the music streamer said it would ax 6 per cent from its workers – the latest in a series of big cuts announced by the high-flying technology group. It then pared the gain to 2.4 percent.
“The market is taking a risk-on approach at the moment, seeing that we will have a soft landing and a more positive outlook for rates and inflation,” said Neil Birrell, chief investment officer at Premier Miton. There are strong results for chipmakers, “Barclays notes have had enough influence,” Birrell added. “He’s been a big bear, so being positive is a big change.”
The move comes after Fed governor Christopher Waller last week threw his weight behind a 0.25 percentage point interest rate hike at the US central bank’s next policy meeting in early February, although he warned there was “quite a way to go” before inflation fell again. for 2 percent. The Fed raised borrowing costs by half a point at its previous meeting in December.
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