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Wall Street Jumps To All-Time Highs On Soft Inflation, Bond Yields Tumble, Bitcoin Soars, Meme Stocks Face Carnage: What’s Driving Markets Wednesday?

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The S&P 500 and the Nasdaq 100 indices rose to fresh record highs during morning trading on Wednesday following a broadly in-line inflation report and cooler-than-expected retail sales data for April, as traders increased their rate cut bets.

Inflation calculated on the Consumer Price Index (CPI) basket came in at 3.4% year-on-year in April 2024, matching estimates and snapping a streak of three consecutive months of hotter-than-expected readings.

Market-implied probabilities on the Federal Reserve enacting a rate cut as early as September 2024 rose to over 70%, according to CME Group’s FedWatch Tool. Cumulatively, traders are now fully pricing in two rate cuts of 25 basis points by year end.

The rate-sensitive 2-year Treasury yields tumbled to 4.75%, down by 7 basis points, marking a notable break below its 200-day moving average.

The U.S. dollar fell across the board vis-à-vis other major currencies, with the greenback losing as much as 1% against the low-yielding Japanese yen.

Among sectors, both tech and real estate rallied the most, given their high sensitivity to interest rates. Top industry performers were homebuilders, as tracked by the iShares U.S. …

Full story available on Benzinga.com

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