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Stocks in the red as investors pare bets on rate cuts

Lucy Harley-McKeown
Updated
People walk past the New York Stock Exchange Tuesday, April 9, 2024 in New York.European equities have dipped in early trading while Asian stocks closed mostly higher, with investors mainly focusing on a U.S. inflation report and what it means for interest rate cuts by the Federal Reserve. (AP Photo/Peter Morgan)
US stocks rose as investors await an all important US inflation print on Wednesday. (ASSOCIATED PRESS)

The FTSE 100 and stocks in Europe started in the red on Tuesday before a mixed afternoon, while US stocks rose, as investors await an all important US inflation print on Wednesday.

  • The FTSE 100 (^FTSE) was back in the red, down 0.2% by the closing bell, while Germany's DAX (^GDAXI) declined 1.3% and the CAC (^FCHI) fell 1%.

  • The pan-European STOXX 600 (^STOXX) fell 0.7%.

  • The Dow Jones Industrial Average (^DJI), the S&P 500 (^GSPC), and the tech-heavy Nasdaq 100 (^NDX) were all higher after the opening bell, before diving into the red as jitters set in.

  • Investors in the US have pared back bets on a rate cut to their lowest levels since October, according to LSEG data reported by Reuters.

  • The prospect of a first 25 basis point cut in June stood at 49%. It was 57% a week ago, CME Group data showed on Monday.

  • Fading rate-cut hopes have also helped push up the 10-year Treasury (^TNX) yield near five-month highs — another potential headwind for stocks, with the 5% level seen as the key point of concern. The benchmark yield slipped on Tuesday to about 4.4%.

  • On Wednesday, key inflation data from the CPI print will give more of a read on what path the Federal Reserve might take, as officials have urged caution. Until then, stocks are likely to be range-bound.

Follow along for live updates:

LIVE COVERAGE IS OVER14 updates
  • Lucy Harley-McKeown

    That's all for now!

    Thanks for reading. Head over to our US site for more market moving news.

  • Lucy Harley-McKeown

    Boeing's latest

    Here's the latest on beleaguered Boeing (BA), which was one of our trending tickers yesterday.

  • Lucy Harley-McKeown

    'Interest rates could hit 8%' says US bank boss

    In an annual letter to shareholders, JPMorgan boss Jamie Dimon said Dimon said that the bank was ready for a "very broad range" of rates, from 2% to 8% or even higher, potentially pushed up because of high government spending and the need to curb price rises.

    As reported by the BBC, JPM is looking at a wide range of scenarios because of "persistent inflationary pressures".

    The news comes as bets weaken on early rate cuts. The Federal Reserve has been at pains to warn that inflation might seem to be fading, but isn't out of the picture as a threat to the economy yet.

  • Lucy Harley-McKeown

    Gold rally benefits miners

    Commodities giants Fresnillo (FRES.L), Rio Tinto (RIO.L) and Anglo American (AAL.L) are all up by more than 1.5% as we go into lunch. The jump in gold prices is apparently something to do with this:

  • Lucy Harley-McKeown

    What to expect in tomorrow's US CPI print

    Nick Timiraos from WSJ has the latest:

  • Lucy Harley-McKeown

    BP on the move: commentary

    “Shares in BP hit their highest level in six months after it said first quarter upstream production would be higher than the previous three months," said Russ Mould, investment director at AJ Bell.

    “Sentiment has also been helped by Brent Crude holding firm above $90 a barrel which creates a positive earnings backdrop for the oil industry.

    “It’s impossible to judge a company purely based on three months’ performance but full year guidance implies BP is hoping to quietly get on and do the job, achieving small incremental gains which should be enough to keep the market happy.”

  • Lucy Harley-McKeown

    How the US is faring in premarket

  • Lucy Harley-McKeown

    Leading the FTSE today: BP

    Among stocks leading the FTSE 100 today is BP. Our reporter Pedro Goncalves explains why:

    BP is expecting to report a strong performance from its trading business in the first quarter thanks to a market improvement from buying and selling oil.

    The oil major said that production is expected to have been “higher” than the last three months of 2023 when it reports its results on 7 May.

    Meanwhile, gas and low carbon energy production will be “slightly higher”, the business said.

    But as oil and gas prices have dropped, the business nevertheless expects to take a financial hit.

    BP warned shareholders to expect a $200m-$400m (£158m-£316m) hit to its underlying replacement cost profit before interest and tax because of the fall in the gas price and some other issues.

    On top of that, the company’s oil production unit expects to take a $300m-$600m hit. This is partly due to production in the Gulf of Mexico and the United Arab Emirates being hit by price lags.

  • Lucy Harley-McKeown

    Rent-a-room: Cost of living forces homeowners to get creative

    Over one in every 10 (12%) London homeowners have started renting out a room in their house in the past year to generate additional income, according to Barclays Consumer Spend report.

    The trend is not exclusive to the capital, as some 3% of homeowners across the UK have also rented out a room in their property to make a bit more money.

    UK homeowners have been particularly hit by cost of living woes, with the average rate on a two-year fixed deal currently stands at 5.74%, while for a five-year deal, rates are around 5.24%, according to figures from Uswitch.

    READ MORE: UK homeowners renting out rooms amid high mortgage rates

  • Lucy Harley-McKeown

    Gold hits new all-time highs (again!)

    The spot price of gold is on the up again today, charging past $2,350.

  • Lucy Harley-McKeown

    HSBC takes the L over Argentina

    HSBC has announced it is selling up shop in Argentina to Grupo Financiero Galicia, Argentina’s fifth largest bank, for $550m. The operation covers banking, asset management and insurance and $100m in subordinated debt.

    Due to the country's currency crisis the maths come out at a pre-tax loss of $1bn on the sale, after the peso-denominated book value is converted into US dollars.

  • Lucy Harley-McKeown

    Tuesday trade in Asia

    Japan's Nikkei (^N225) climbed more than 1% on Tuesday, regaining some of last week's selloff — its worst weekly performance since December 2022. Investors took advantage of the discounted stocks, catching the tailwind of an earlier Wall Street rally.

    Meanwhile, the Hang Seng (^HSI) in Hong Kong also rose 0.7% after the region's leaderJohn Lee said on Monday the authorities were considering additional measures to bolster the securities market. Chinese stocks have taken a hit in recent months as caution took hold over stagnant national growth.

  • Lucy Harley-McKeown

    Overnight in the US

    Here's the news from our US team:

    US stocks ended Monday's session little changed as investors kicked off a big week that will see a fresh inflation data test for rate-cut views and the start of first quarter earnings season.

    The Dow Jones Industrial Average (^DJI), the S&P 500 (^GSPC), and the tech-heavy Nasdaq Composite (^IXIC) all closed near the flatline.

    A strong jobs report helped lift stocks on Friday but couldn't fend off weekly losses as doubts about the Federal Reserve's resolve for interest rate cuts preyed on minds.

    The yield on the 10-year Treasury (^TNX) stood at 4.42% following a bond sell-off last week. While the benchmark has pared gains, it is still within reach of the key 4.5% level seen by some as a potential tipping point for a run-up toward last year's highs.

  • Lucy Harley-McKeown

    Good morning!

    Hello from London, where FTSE 100 futures contracts are suggesting the index is set to start the day on the back foot. There was barely any movement in the US overnight and a day in the green across a range of Asian indices. Let's get to it.

Watch: Wall St. ends flat as investors await CPI, earnings

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