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US stocks rise as bad news is good news again

FXStreet (Mumbai) - The US equities advanced on Monday as investors cheered the drop in the December Fed rate hike bets leading to a risk-on rally across the global markets.

At the time of writing, the Dow Jones Industrial Average (DJIA) was up 194 points. The S&P 500 was up 26 points and the Nasdaq was up 44 points. Major gainers include General Electric (up 3%) and Twitter (up 3%).

Bad news is good news

As per CME Fed watch data, the probability of a rate hike in October is now just 8%, while that in December is 28.5%. The 2-year yield, which also mimics rate hike expectations, declined from 0.68% to the current level of 0.574%.

Markets have reacted positively to the drop in the Fed rate hike bets. The equity markets across the globe rallied, while the funding currencies declined and the treasury yields rose.

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