BofA warns Fed risks policy mistake with early rate cuts
Investing.com - Futures linked to Canada’s main stock exchange edged lower on Friday, as investors cautiously eyed uncertainty around the trajectory of U.S. trade policy.
By 06:34 ET (10:34 GMT), the S&P/TSX 60 index standard futures contract had fallen by 5 points, or 0.3%.
President Donald Trump has said that Washington will begin issuing formal letters to major economies outlining new U.S. export tariff rates as early as Friday.
He said the U.S. will forgo lengthy negotiations with over 170 countries and instead unilaterally impose flat tariff rates ranging between 20% and 30%.
The TSX/S&P composite index rose by 0.6% at 27,034.26 on Thursday, surpassing a previous record high notched in the prior session. For the year, the average has advanced by 9.3%.
Stronger-than-anticipated U.S. labor market data underpinned sentiment, although markets are still unclear how the White House will approach the end of a pause to sweeping "reciprocal" tariffs on July 9.
S&P, Nasdaq log record highs
The benchmark S&P 500 and tech-heavy Nasdaq Composite both logged fresh all-time peaks on Thursday, as investors cheered the U.S. jobs report and shrugged off predictions that the Federal Reserve would now opt not to slash interest rates this month.
By the end of trading on the final day of a holiday-shortened week, the S&P 500 had climbed by 0.8% and the Nasdaq had advanced by 1.0%. The blue-chip Dow Jones Industrial Average also gained 0.7%, hovering within striking distance of its own record high. Stock markets in the U.S. will be shuttered on Friday for the Independence Day holiday.
Labor Department data showed that the U.S. added more roles than anticipated in June, although the numbers masked a slowdown in private hiring to an eight-month low. The unemployment also ticked down to 4.1%, but this was partly driven by more Americans choosing to leave the workforce, while a decline in the length of the average work week suggested that businesses may be ratcheting down hours.
Still, the figures underlined broad resilience in the labor market that, coupled with recently benign inflationary pressures, could persuade Fed policymakers to hold off on cutting borrowing costs at their next two-day gathering on July 29-30.
Meanwhile, in individual stocks, Nvidia (NASDAQ:NVDA)’s market capitalization surged to nearly $4 trillion. The designer of high-end artificial intelligence chips and focal point of a boom in enthusiasm around the nascent technology is now on pace to become the most valuable company in history.
Oil prices dip
Oil prices dropped with focus squarely on an upcoming OPEC+ meeting for more cues on production, while Iran reaffirmed its commitment to nuclear non-proliferation.
At 06:50 ET, Brent oil futures for September fell 0.9% to $68.19 a barrel, and West Texas Intermediate crude futures fell 0.9% to $65.06 a barrel.
Both contracts were up between 1% to 2% this week, but were nursing double-digit losses from the prior week. Trade was thinned by the U.S. Independence Day holiday.
The Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+, is set to meet over the weekend. Recent reports indicated the cartel is gearing up to once again hike production by 411,000 barrels a day in August, following similar hikes in the past three months.
The production hikes come as the OPEC+ scales back two years of sharp production cuts, in part to offset the economic impact of persistently low oil prices.
"These larger supply increases should leave the global oil market well supplied for the remainder of the year. It’s set to return to a large surplus in the fourth quarter of this year. Clearly, recent price action suggests the market is mostly focused on this supply," said analysts at ING, in a note.
Elsewhere, U.S. news website Axios reported on Thursday that the U.S. was planning to meet with Iran next week to restart nuclear talk, while Iran Foreign Minister Abbas Araqchi said Tehran remains committed to the nuclear Non-Proliferation Treaty.
Gold inches higher
Gold prices ticked higher, rebounding after sharp losses in the previous session, putting bullion on course for a weekly gain fueled in part by Washington’s impending tariff decisions.
Spot gold rose 0.3% $3,334.43 an ounce, while gold futures for August gained 0.1% to $3,344.81/oz by 06:47 ET.
The yellow metal fell nearly 1% on Thursday after the solid U.S. jobs report dented bets of a July Fed rate cut, but was still on track to rise this week, breaking a streak of two consecutive weekly declines.