Technology chip strength, nasdaq rose more than 2%, CPI will be announced 50BP rate increase probability?

2022-06-01 0 By

Us stocks: technology chip strength, nasdaq rose more than 2%, CPI will be announced, the probability of a 50BP rate increase?Major U.S. stock indexes closed higher Wednesday, with the Dow ending 0.86% higher and the Nasdaq finishing strong, rising 2.08 percent to its highest since the rally.The S&P 500 index rose 1.45% and closed above its 60-day moving average. Analysts believe that the market valuation is basically reasonable after a correction.From the disk, the three indexes continued to strengthen, large technology stocks, chip stocks, social media stocks, hot concept stocks and other strong performance.Nvidia rose more than 6.3%, Facebook rose more than 5%, Apple rose 0.83% and Microsoft rose 2%.In addition, new energy vehicle stocks also performed, Xiaopeng Motor up 9.6%, Nio up 5.7%.On the news front, the Treasury sell-off has temporarily calmed ahead of the latest CPI inflation data due on Thursday, which is expected to show a 7.3% year-on-year rise to a 40-year high.The consumer price index rose 7% in December from a year earlier, the highest in 40 years.U.S. consumer price data due on Thursday should cement expectations for a Federal Reserve rate hike next month, with the strong data further supporting expectations for a 50 basis point hike.Some analysts say that the improved market sentiment is based on more optimism about the prospect of economic reopening.Meanwhile, the main drivers of the recent Treasury sell-off remain: expectations of a hawkish Federal Reserve and the threat to real earnings of listed companies from rising Treasury yields.That means there is a high risk of a sudden shift in sentiment ahead of Thursday’s CPI inflation data.There is disagreement over whether to raise rates by 25 or 50.In the context of the latest US PCE price index year-on-year growth reaching the highest level in 40 years and the new non-agricultural data in January exceeding expectations, the market has enhanced the expectation of the Fed to raise interest rate 50BP. However, due to the adverse impact on the stock market and the large interest payment pressure on the US high debt,The odds of a 50BP fed hike in March are low.