Weak trade data from China and investors FED Futures indices traded in the US are mixed due to the cautious approach to the meeting.
The American stock market has put a smile on the face of investors since October. In the last 9 months, the technology-heavy stock index Nasdaq 100 has gained 35%. Over the same period, the Dow Jones and S&P 500 rose 17% and 22% respectively. However, the Russell 2000 index, which includes companies with relatively small capitals, remained in the shadow of giants with a 12% return.
As of 13.45 Türkiye time, the latest situation in the US futures stock indices is as follows:
- Dow Jones: 33,594 , -0.07%
- S&P 500: 4.291 , +0.02%
- Nasdaq 100: 14,581 , -0.04%
China’s Exports Contracted More Than Expectations
Trade data from China, the world’s largest exporter, worried the markets. The export and import figures announced at 06:00 in the morning, Türkiye time, were out of expectations.
The Asian giant’s annual exports were expected to contract by -0.4% as of May. However, the rate announced by official channels was -7.5%. Market participants, on the other hand, expected imports to contract by -8% year-on-year, compared to -4.5%. The over-expected contraction in Chinese exports pushes the markets to a pessimistic view of the economic recession.
Will FED Lower Interest Rates?
During the profitable winter months, most of the experts predicted that the FED would lower the interest rates from the third quarter of 2023. However, the resilient core inflation changed expectations despite the decline in the headline. Due to the possibility that the high interest rate environment will continue for a while, the profitability concerns of the investors on the companies are increasing.
The next monetary policy meeting of the US Federal Reserve will be held on June 14. 77% of market participants expect the rate hike to be skipped this month.
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