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Live news: US stocks hold gains as traders digest Fed outlook
US stocks opened at fresh record highs and Treasury yields dropped following the release of cooler than expected US inflation data on Wednesday, as investors bet on more interest rate cuts this year.
The S&P 500 was 0.9 per cent higher shortly after the open, while the Nasdaq Composite rose 1.2 per cent.
After Wednesday’s figures, traders in the futures market fully priced in two interest rate cuts this year, beginning in November, according to Bloomberg. Previously the average estimate was between one and two.
Traders also amped up bets on a September cut, putting the odds at 84 per cent, compared with a 60 per cent chance beforehand.
The two-year Treasury yield, which moves with interest rate expectations, fell to its lowest level since early April, down 0.16 percentage points to 4.68 per cent.