Weekly financial markets roundup: September 9 – 13, 2024

This week saw a continuation of the tech rally that propelled major U.S. indices to new highs. The S&P 500 ($SPXUSD) and Nasdaq ($NDXUSD) marked their fourth consecutive day of gains, with tech stocks driving the upward momentum. Investors closely monitored fresh inflation and labor data, which reinforced expectations of a quarter-point interest rate cut from the Federal Reserve at its upcoming meeting. Meanwhile, the European Central Bank (ECB) followed suit, lowering its policy rate by 25 basis points, as anticipated, fueling further optimism in the markets.

Let’s dive into the key market developments of the week.

Gold hits all-time high as Fed rate-cut speculation boosts appeal 💰

Gold ($XAUUSD) prices surged to a record high, driven by growing expectations of an interest rate cut from the Federal Reserve next week, following signals of a cooling U.S. economy. Spot gold rose 1.7%, reaching $2,570 per ounce, while U.S. gold futures closed 1.5% higher at $2,580.60 per ounce.

This rally was fueled by U.S. Labor Department data showing a slight uptick in initial jobless claims, rising by 2,000 to a seasonally adjusted 230,000, alongside modest producer price increases in August. Despite the higher service costs, inflation trends appear to be easing.

Dollar drops as Yen strengthens on hawkish Bank of Japan signals 💴

The U.S. dollar fell sharply, dropping as much as 0.97% to 140.415 yen ($USDJPY), its weakest level since December 28. The yen’s rally was bolstered by hawkish comments from Bank of Japan officials, including policy board member Naoki Tamura, who expressed concern on Thursday about rising inflation risks.

The dollar index, which measures the greenback against the yen and five other major currencies, fell to a one-week low at 101.00. U.S. Treasury yields also reacted, with benchmark 10-year Treasuries rallying and pushing yields down 4 basis points to 3.638%. The more rate-sensitive two-year yields dropped 6.3 basis points to 3.585%, reflecting the growing uncertainty surrounding the U.S. economic outlook.

EUR/USD gains from 1.1000 after ECB delivers 25 bps rate cut 💶

The $EURUSD pair rebounded from the 1.1000 level following the European Central Bank’s (ECB) decision to cut its key borrowing rates by 25 basis points, as anticipated. This marks the second rate cut in the ECB’s ongoing policy-easing cycle. The Rate On Deposit Facility was lowered to 3.5%, while the Main Refinancing Operations Rate was reduced by 60 bps to 3.65%.

The euro’s recovery was supported not only by the ECB’s rate cuts but also by the weakening U.S. dollar. Softer-than-expected U.S. Producer Price Index (PPI) data for August added pressure on the dollar, helping $EURUSD bounce back from its more than three-week low during the North American session.

Oracle sees $104 billion sales in fiscal 2029 on cloud expansion 💻

Oracle Corp. ($ORCL) projected that its annual revenue will reach at least $104 billion by fiscal 2029, highlighting the growth potential of its cloud infrastructure business. This optimistic forecast was shared during Oracle's annual financial analyst briefing on Thursday, causing the company's shares to surge by 5% in extended trading.

The company, which has been one of the top-performing software stocks this year with a 53% gain, also updated its revenue outlook for fiscal 2026, raising it to at least $66 billion from the previously projected $65 billion. This exceeds analysts' expectations, who had estimated $64.5 billion in revenue for 2026, according to a Bloomberg survey.

Nvidia stock is back on top 🤖

Nvidia ($NVDA) is poised to finish the week on a high note, with its stock gaining 1.92% in Friday’s premarket trading. After a stellar performance throughout the week, Nvidia is looking to extend its upward momentum as investors continue to show confidence in the company’s growth prospects, particularly in the artificial intelligence and semiconductor sectors.

Summary 📊

The upcoming week promises to be pivotal for the financial markets, with central banks gearing up to announce their key interest rate decisions. On September 18th, the Federal Reserve will decide whether to cut rates by 0.25% or 0.50%, or perhaps leave them unchanged. This decision could spark significant market reactions, particularly in major indices like the Dow Jones ($DJIUSD), Nasdaq ($NDXUSD), and S&P 500 ($SPXUSD). Additionally, currency traders will be closely watching pairs like $EURUSD and $GBPUSD, as the Bank of England is also scheduled to announce its rate decision later in the week.

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