Lucy Harley-McKeown
Stocks in the red as investors pare bets on rate cuts
The FTSE 100 and stocks in Europe started in the red on Tuesday before a mixed afternoon, while US stocks rose, as investors await an all important US inflation print on Wednesday.
The FTSE 100 (^FTSE) was back in the red, down 0.2% by the closing bell, while Germany's DAX (^GDAXI) declined 1.3% and the CAC (^FCHI) fell 1%.
The pan-European STOXX 600 (^STOXX) fell 0.7%.
The Dow Jones Industrial Average (^DJI), the S&P 500 (^GSPC), and the tech-heavy Nasdaq 100 (^NDX) were all higher after the opening bell, before diving into the red as jitters set in.
Investors in the US have pared back bets on a rate cut to their lowest levels since October, according to LSEG data reported by Reuters.
The prospect of a first 25 basis point cut in June stood at 49%. It was 57% a week ago, CME Group data showed on Monday.
Fading rate-cut hopes have also helped push up the 10-year Treasury (^TNX) yield near five-month highs — another potential headwind for stocks, with the 5% level seen as the key point of concern. The benchmark yield slipped on Tuesday to about 4.4%.
On Wednesday, key inflation data from the CPI print will give more of a read on what path the Federal Reserve might take, as officials have urged caution. Until then, stocks are likely to be range-bound.
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