Stocks rally ahead of Fed Meeting and Trump Tweets – Here’s what you need to know

Stock Market Update Tuesday, June 18th, 2019

Stocks rallied 1.0%+ ahead of tomorrow’s Fed Statement.

Usually, stocks are quiet ahead of a Fed policy decision (like yesterday). But positive trade comments, combined with the belief that the Fed is ready to cut rates this year, helped drive the major indices higher.

This morning President Trump helped fuel a rally after tweeting that he had a “very good” telephone call with President Xi of China. He said that teams from both countries are ready to meet ahead of next week’s highly anticipated G-20 summit meeting in Japan.

At one point the S&P was higher by 1.4%, coming within 0.8% (24 points) of its record high before a small pullback in afternoon trading.

The pullback came after reports that Trump is considering demoting Fed Chair Jerome Powell. But the White House pushed back, saying this wasn’t the case. Trump himself said “let’s see what he does” when asked about the demotion.

Here’s where the major indices ended the day:

  • The S&P finished with a 1.0% gain. Up 28 points, the S&P ended at 2,918.
  • The DOW ended higher by 1.4%. Adding 353 points, the DOW closed at 26,466.
  • The NASDAQ was up 1.4%. With a 109 point gain, the NASDAQ finished at 7,954.

Crude Oil (CL) got in on the action as well, finishing with its 2nd best day of the year. With a 3.7% gain, CL ended at $53.87 a barrel.

Caterpillar (CAT) and Deere (DE), two stocks caught in the trade war crosshairs, took off on Trump’s trade comments. CAT rallied 2.4% and DE finished higher by 3.3%.

Tech stocks hurt by trade worries (and the White House’s restrictions against Chinese telecom Huawei) also rallied.

Nvidia (NVDA) rallied 5.4% and Micron Technology (MU) finished higher by 5.7%. Apple (AAPL) was also a winner today, finishing with a 2.4% gain.

Facebook (FB) jumped at the open after releasing a white paper on its cryptocurrency project. FB was up as much as 2.9% but finished the day with a small 0.3% loss.

All eyes are on tomorrow’s Fed Statement at 2pm ET.

It’s expected that the Fed won’t cut rates. But traders want to hear that the Fed is making a move to cut rates this year. The CME Group’s FedWatch tool shows that traders believe the Fed will consider 3 cuts this year. The Fed raised rates 7 times in 2017 and 2018.

Here is the economic calendar for the week:

Real Time Economic Calendar provided by Investing.com.

This Stock Market Update was provided by Rockwell Trading Services LLC.

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