US equities rose Tuesday as results from Bank of America Corp. and Morgan Stanley bolstered bank shares, and a rally in stocks linked to artificial intelligence resumed.
Figures on industrial production and retail sales missed estimates, and traders are now fully pricing in a quarter-point hike at the Federal Reserve’s meeting next week.Signs of slowing inflation and an improving economic picture have led traders to dial back wagers on how high the US overnight benchmark rate will go. “However, a still-strong labor market, positive real disposable incomes and a gradual easing in price pressures appears to be supporting consumption for now.”In Europe, stocks and bonds were also higher after ECB council member Klaas Knot said monetary tightening beyond next week’s European Central Bank meeting was anything but guaranteed — suggesting officials could soon pause their campaign of interest-rate hikes.“It’s clear that it’s the receding inflation narrative which is driving everything,” said Gilles Guibout, a portfolio manager at Axa Investment Managers in Paris.
