S&P 500: Equities jump on lower Oil and rates repricing – Deutsche Bank

Deutsche Bank strategists note a strong rally in US equities, with the S&P 500 posting its largest gain in two months as falling Oil prices and reduced Fed hike expectations improved the near-term outlook. Tech and small caps outperformed, while Metals such as Gold and Silver also advanced alongside the broader risk-on move.

Risk assets respond to easing stagflation fears

"For equities there was also a huge surge, as the prospect of lower inflation and fewer rate hikes led to growing optimism on the near-term outlook."

"So the S&P 500 (+1.75%) posted its biggest jump in the last two months, whilst futures (+0.10%) are pointing to further gains today."

"And there was a huge surge for some of the recent laggards, with the Philly semiconductor index up +7.91%, the NASDAQ up +2.54%, and the small-cap Russell 2000 up +3.02%."

"Metals also rallied, with copper up +2.08%, gold up +3.48%, whilst silver (+6.23%) once again traded with a higher beta."

"Equities put in a strong performance too, even before the news of a potential US-Iran deal, with the Stoxx 600 (+0.54%) ending a run of 4 consecutive declines, alongside gains for the FTSE 100 (+0.48%), CAC 40 (+0.48%) and the DAX (+0.06%)."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)