This report is from today's CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.
What you need to know today
- All major stock indexes in the U.S. rose Monday, with the tech-heavy Nasdaq Composite enjoying the biggest jump.
- Asia-Pacific markets followed Wall Street higher Tuesday. Japan's Nikkei 225% rose 2% — pushed up by a 5% jump in Toyota — and broke the 33,000 level for the first time since July 1990. Investors are excited over Japanese stocks because of new market rules and Warren Buffett's endorsement of five Japan firms.
- China's economy and stocks aren't doing as hot as Japan's. The Shanghai Composite fell around 0.1% and the yuan hit a 6-month low as the People's Bank of China cut a short-term borrowing rate in an attempt to boost liquidity. Analysts think it's a signal that the central bank will cut its medium-term and loan prime rate in the weeks ahead.
- Goldman Sachs CEO David Solomon told CNBC that commercial real estate's in such a bad shape that his bank will write down bad loans and drop valuations in its real estate investments. Still, Solomon said he's "surprised" by the resilience of the U.S. economy.
- JPMorgan Chase's prepared to pay $290 million to settle a lawsuit brought against it by a victim of late sexual predator Jeffrey Epstein, a source told CNBC. However, the bank's litigation with the U.S. Virgin Islands and its claims against Jes Staley, a former executive who was friends with Epstein, are still pending.
- The Federal Trade Commission filed an injunction Monday to block Microsoft's proposed $68.7 billion acquisition of Activision Blizzard. The FTC is worried that Microsoft could prevent Activision Blizzard from launching games on rival game consoles, like Sony's PlayStation.
- PRO Last year was awful for initial public offerings, with only $7.7 billion raised, compared to the 10-year average of $55 billion. But there are signs the IPO freeze is thawing — thanks to markets rallying and interest rates stabilizing.
The bottom line
Hopes for a pause in interest rates helped to send stocks higher Monday. The technology sector, which is more sensitive to rate fluctuations, especially benefitted. (Higher rates today lower the value of tech's growth tomorrow.)
Traders are betting there's a 72% chance the Federal Reserve will keep rates unchanged at this week's meeting, according to the CME Group's FedWatch tool. That's because economists think the consumer price index, coming out later today, will show May's inflation slowing to just 0.1% from the previous month, or 4% year over year. That's a "headline number [that] is going to feel good," said Mark Zandi, chief economist at Moody's Analytics.
Big Tech stocks mostly rose at least 1%; Apple even hit an all-time high of $183.79 per share. Meanwhile, Oracle's better-than-expected earnings report pushed its shares 3% higher in extended trading.
The Nasdaq popped 1.53% to reach its highest level since April. The S&P 500 added 0.93%, further adding to the gains it's accumulated over the past few days, and the Dow Jones Industrial Average climbed 0.56%.
Despite those big moves, it was a relatively light trading day. On an average day, 80.6 million shares of the SPDR S&P 500 ETF Trust, a tracker of the broad S&P 500 index, are traded. Yesterday, only 31.5 million exchanged hands. That's probably wise, considering inflation data coming out tomorrow and the Fed meeting happening right after that. Tech greatly benefits from lower interest rates, but remember that the converse applies too.
