Investors bet on US Fed easing rates

Bets on a more dovish Fed have boosted tech and growth stocks, whose future profits are discounted less when interest rates fall.

Following last month’s banking crisis, sparked by the collapse of Silicon Valley Bank, investors have become more convinced the Federal Reserve will cut rates in the second half of the year to ward off an economic downturn. Picture: Jeff Chiu/AP

Following last month’s banking crisis, investors have become more convinced the US Federal Reserve will cut rates in the second half of the year to ward off an economic downturn.

Such bets have pushed bond yields lower, supporting the giant tech and growth stocks that hold sway over broad equity indexes. The S&P 500 has gained 6.9% so far in 2023.