US stocks strengthened today. They were supported by the statements of representatives of the US central bank (Fed), which indicated that the Fed will not have to proceed with further interest rate increases. The Dow Jones index, which includes shares of thirty leading American companies, gained 0.40 percent and ended trading at 33,739.30 points. The broader S&P 500 index rose 0.52 percent to 4,358.24 points and the Nasdaq Composite index, which includes many companies from the advanced technology sector, rose 0.58 percent to 13,562.84 points.
Bonds and Pepsi
Ten-year U.S. government bond yields edged lower today in response to comments from Fed officials after climbing to their highest level since 2007 last week. “The Fed is clearly moving away from the prospect of a November rate hike,” analyst Thierry Wizman said, according to Reuters from Macquarie.
Shares of soft drink maker PepsiCo rose 1.9 percent today. The company announced an increase in quarterly profit and improved its outlook for the entire year. Shares of competitor Coca-Cola gained 2.2 percent.
The US dollar weakened on the foreign exchange market today, helped by the decline in US government bond yields. The euro gained roughly 0.4 percent against the dollar shortly after 22:00 CEST, reaching above USD 1.06.
Investors are now awaiting Wednesday’s release of minutes from the Fed’s latest meeting. They hope that thanks to it they will be able to get a better idea of the further development of monetary policy in the US. Last month, the Fed left its key interest rate unchanged in a range of 5.25 to 5.50 percent, as expected. At the same time, he indicated that he intends to keep interest rates at a high level for a longer period of time and that he could raise them further.
The financial markets are now also waiting for Thursday’s report on the development of inflation in the US. They are also monitoring the development of the armed conflict between the Palestinian movement Hamas and Israel, Reuters wrote.