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30.03.2023 02:10 PM
US premarket trading on March 30, 2023. US stock market rally goes on

US stock indices rally as investors expect interest rates to peak soon and banking woes to fade away. European stock indices rise steeply. S&P 500 futures and Nasdaq-100 futures gain at least 0.4% each, following a rally on Wednesday.

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Stocks have recently been bullish on the back of no fresh news about interest rates coming and the situation in the banking sector improving. Today, the United States will deliver data on unemployment, GDB, and personal spending. These figures will shed some light on the Fed's future steps. Investors predict interest rates in the US at about 4.3% by the end of the year, down by approximately 70 basis points from the current level.

US Treasury Secretary Jannet Yellen will speak about the current banking crisis today and propose additional solutions to the problem. This could stir up optimism in investors and urge them to buy out cheaper bank stocks. In addition, risk sentiment is fuelled by expectations of a dovish pitot from central banks, which is seen as the driving force for stock indices at the end of the quarter.

Still, the current rally is mainly based on expectations rather than actions, which makes the market more exposed if central banks, especially the Federal Reserve, disappoint investors.

Treasury yields remain fairly stable after calm trading on Wednesday when 10-year notes changed little.

Spain's consumer price inflation eased in March due to falling electricity and fuel prices but core inflation remained sticky. So, the ECB will still have to decide on the size of a rate hike.

Elsewhere, oil rebounded amid a standoff of crude flows via Turkey. Gold prices stabilized, and BTC grew above $28,000 per coin.

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Speaking of the S&P500, demand for risk assets is still strong. If the bulls push the index above $4,064, the target will stand at $4,091. If they manage to take the $4,116 mark under control, the bull market will get stronger. However, if the price goes down amid the lack of reference points and subdued demand, the instrument may break through $4,040 and head toward $4,010, targeting $3,970.

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