US futures rise at start of Q2, fresh record for gold- what’s moving markets

U.S. futures signaled a positive start on Wall Street as the second quarter commenced, with gold prices surging to a new record amidst expectations for Federal Reserve rate cuts. Trade volumes are expected to be light due to Easter holidays, while oil prices also saw an uptick. Here’s a rundown of what you need to know for the day ahead.

1. Futures Rise as Q2 Begins
   U.S. stock futures traded higher on Monday, following a market holiday on Friday. Data showing lower-than-expected price increases in February kept the possibility of a June interest rate cut by the Federal Reserve alive. By 04:20 ET (08:20 GMT), Dow futures were up 110 points (0.3%), S&P 500 futures gained 19 points (0.3%), and Nasdaq 100 futures rose by 88 points (0.5%). Wall Street’s sentiment improved as the second quarter commenced, with Chinese PMI data indicating a rebound in manufacturing activity after six months.
   
2. Q2 Commences with Optimism
   The U.S. stock market had a robust start to the year, buoyed by optimism surrounding artificial intelligence stocks and expectations of Fed interest rate cuts. Each of the three main U.S. indexes recorded solid quarterly gains, with the S&P 500 posting its largest first-quarter gain since 2019. The continuation of this rally into the second quarter hinges on Fed actions and corporate earnings, which are set to begin in earnest in April.
   
3. Gold Hits New Highs on Rate Cut Speculation
   Gold prices reached record highs on Monday, driven by softer U.S. inflation data that reinforced expectations of a Fed rate cut in June. Spot gold rose 1.1% to $2,258.88 per ounce, hitting an all-time high of $2,265.73 earlier in the session. Traders are pricing in a 60% probability of a June rate cut, reducing the opportunity cost of holding gold. Gold recorded its largest monthly gain in over three years in March.
   
4. Microsoft to Separate Teams and Office Globally
   Microsoft announced plans to sell its Teams chat and video app separately from its Office product globally, following a similar move in Europe. This decision comes after the European Commission investigated Microsoft’s bundling of Office and Teams in response to a complaint by Slack. The move aims to provide customers with more flexibility and address concerns raised by the European Commission.
   
5. Oil Prices Inch Upward
   Oil prices edged higher on Monday, building on recent gains fueled by positive factory data from China and concerns over tight supplies. U.S. crude futures rose 0.5% to $83.58 a barrel, while the Brent contract climbed 0.3% to $87.33 per barrel. China’s manufacturing expansion supported oil demand, while OPEC+ pledged to extend production cuts, tightening crude supply. Both benchmarks finished higher for the third consecutive month in March.

(Reporting by Reuters)