MercoPress. South Atlantic News Agency

Wall Street fresh records on expectations of a FED interest rate cut

The Federal Reserve is widely expected to cut benchmark US interest rates by 0.25 percentage points at its upcoming July 30-31 meeting.

Optimistic investors drove Wall Street to fresh record highs amid strong expectations of an impending US interest rate cut. The Dow Jones index lifted by 179 points, 0.7 per cent, to 26,966. The broader S&P 500 posted its third consecutive record high, up 0.8 per cent, while the tech-heavy Nasdaq rose 0.75 per cent.

The Federal Reserve is widely expected to cut benchmark US interest rates by 0.25 percentage points at its upcoming July 30-31 meeting.

A tweet from US President Donald Trump, calling on the Federal Reserve to weaken or “manipulate” the US currency, also raised those expectations.

“China and Europe [are] playing [a] big currency manipulation game and pumping money into their system in order to compete with USA,” Mr Trump wrote.

The US bond markets are also indicating a rate cut.

China and Europe playing big currency manipulation game and pumping money into their system in order to compete with USA. We should MATCH, or continue being the dummies who sit back and politely watch as other countries continue to play their games - as they have for many years!

US 10-year Treasury bond yields continued to fall below 2 per cent. America's long-term interest rates are now 1.953 per cent, their lowest level since November 2016.

Rising expectations for a rate cut, fuelled by softer economic data and comments from global central banks indicating a more dovish stance drove Wall Street's rally in the last few weeks.

Furthermore, the latest figures on the labour market showed US private employers added 102,000 new jobs in June, well below economist' expectations (135,000), according to the ADP National Employment Report.

Spot gold was steady at $US1,418.54 an ounce.

Brent crude oil has jumped 2.4 per cent to $US63.89 a barrel.