Wall Street breaks its losing streak

The main US stock indices may finally break the series of declines. Today they remain stable after Thursday's gains. Dow Jones gained 1,61 percent yesterday, S & P 500 - 1,99%, a Nasdaq - 2,68 percent It could have been caused by the publication of good results of listed companies from the retail sector.

During the week, the Dow Jones increased by 4,4 percent. and is on track to break a streak of eight consecutive weeks of decline, the longest since 1923. The S&P 500 and Nasdaq have gained 4% this week, respectively. and 3,4 percent, which opens the door for these indices to overcome the seven-week-long collapse, the longest since 2001.

The outlook for lower interest rates is favorable for the stock exchanges

Investors on the US stock market seem to make their decisions dependent on, inter alia, plans Federal Reserve regarding interest rate increases. And here the market estimates indicate that the chances of a sharp monetary tightening are currently lower than at the beginning of this month.

A few weeks ago it was estimated that the peak of the cycle of interest rate hikes in the United States could fall in the region of 3,25-3,5%, and now it is around 2,75-3,00 or even less. A break in the cycle is also possible to assess how the US economy is responding to rising interest rates.

Inflation already in a downward trend?

Today it will be published April reading of PCE core inflation in the US. According to market assumptions, the inflation peak could have been set in February at the level of 5,4%. In March, it was recorded 5,2%, and in April the expectations are 4,9%. If the forecasts are correct, the stock indices may already have their lows behind them.

The return in the inflationary trend and the prospect of easing interest rate hikes in the US, in turn, may have an opposite effect on the dollar. USD seems the weakest in a month today anyway. The rate of the main currency pair EUR / USD increased from approx. 1,0350 to approx. 1,08. A depreciating dollar may induce investors to move towards riskier assets.