Deutsche Bank strategists report that US equities, spearheaded by the S&P 500, have reached new record highs, driven by softer inflation data and lower oil prices which reinforce expectations that the Federal Reserve can maintain its current policy stance [1]. The S&P 500 rose by 0.65%, marking another record, while the equal-weighted S&P 500 outperformed with a 0.74% gain and also hit a new high [1]. The rally was broad-based, with rate-sensitive sectors and major tech indices participating. The NASDAQ climbed 0.81%, and the Philly semiconductor index advanced by 0.46%. The Magnificent 7 group of stocks recovered, posting a 1.20% increase [1].
In contrast, Asian and European markets showed mixed performance. Hong Kong's Hang Seng fell by 0.93%, Australia's S&P/ASX 200 declined by 1.01%, and mainland Chinese benchmarks saw modest declines, with the CSI 300 down 0.12% and the Shanghai Composite down 0.21% [1]. European markets were less resilient, as the STOXX 600 edged lower by 0.04% for a second consecutive session [1]. However, the KOSPI in South Korea extended its rally for a fifth straight session, rising 1.99%, and Japan's Nikkei was up 0.56% [1].
US equity futures are showing little movement, with S&P 500 futures flat and Nasdaq futures down 0.15%. European futures are rebounding, up between a quarter and half a percent [1]. The positive momentum in US equities is attributed to dovish newsflow, including softer inflation and lower oil prices, which support expectations for a steady Fed policy [1].
CONCLUSION
US equities, led by the S&P 500 and major tech indices, have reached new record highs amid expectations for a steady Federal Reserve policy, supported by softer inflation and lower oil prices. The rally is broadening, with equal-weighted benchmarks outperforming, while Asian and European markets show mixed results. Market sentiment remains positive for US stocks, with futures indicating stability.