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Wall Street gains amid a tech-led rally ahead of key CPI data

bull and bear markets

US stocks finished higher to kick off the week ahead of the key US CPI data that is due for release later today as investors may speculate further cool in inflation, which will promote the Fed to stop hiking rates sooner. Tech stocks led the broad market’s gains due to a recovery in risk appetite. The benchmark US 10-year bond yield slid, sending the US dollar down and buoying most other major G-10 currencies. However, the yield on the short-dated, 2-year tenure bond climbed higher, while the fear gauge, VIX rose above 20, signing that volatility is ahead amid the upcoming inflation data. It is expected that the US headline CPI for January will fall to 6.2% from 6.5% in December, but any higher-than-estimated data may lead to a renewed selloff in equities.

Asian markets are set to open higher, with the ASX 200 futures up 0.67%, Nikkei 225 futures rising 0.95%, and Hang Seng Index futures advancing 0.77%. 

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  • 10 out of 11 sectors in the S&P 500 closed in green, with growth sectors, including Consumer Discretionary and Technology, leading gains up 1.5% and 1.8%, respectively. The energy sector is the only laggard, down 0.6%.  Most big techs finished higher, with Microsoft and Meta platforms both up 3%, while Apple’s shares rose 1.9%.
  • Ford plans to invest $3.5 billion to build an electric vehicle battery plant in Michigan, collaborating with Chinese partner CATL, aiming to produce the low-cost and faster-charging lithium-iron-phosphate, or LFP batters. The plant is expected to open in 2026 and employ about 2,500 people.
  • Meta Platforms’ chief business officer, Marne Levine steps down after 13 years with the company. Levine previously will officially leave the role on 21 February and leave the company completely in another few months. She previously served as vice president of global public policy at Facebook, and chief operating officer at Instagram. Meta’s shares rose 2.7% amid the broad markets’ comeback on Monday.    
  • USD/JPY spiked more than 100 points despite a weakened US dollar as it seems the BOJ intends to keep its ultra-loss monetary policy, though the central bank has expanded its cap on the 10-year JGB yields, loosening the YCC. Spontaneously, gold prices continued to retreat, suggesting that risk-on sentiment may press on these haven assets on optimism towards the upcoming US CPI data.
  • Crude oil prices retreated from the recent high as the resumption of the Azerbaijani oil exports terminal helped relieved supply concerns after a suspension due to the disruptive Turkey earthquakes. But oil prices may remain strong on an improved demand outlook amid China’s reopening and limited supply due to EU’s sanctions on Russia. 

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