Wall Street Today | Market More Optimistic After St. Patties Weekend

This week will feature two key central bank meetings. On Tuesday, the Bank of Japan is seen as likely to end its negative interest-rate policy, while on Wednesday, the U.S. Federal Reserve could reduce its projection for interest-rate cuts this year.

Mike Wilson, Morgan Stanley’s stock-market strategist, told clients that market participants are looking past the rise in bond yields, which has seen the 10-year Treasury’s yield rise 44 basis points this year.

“From an equity standpoint, the rise in rates this year has not had the typical effect on valuations — i.e., [price-to-earnings] multiples have remained elevated in the face of rising rates. This informs us that, for now, equity investors appear to have moved past the Fed, inflation, and rates and are now squarely focused on the better growth [that] consensus expects to arrive this year,” he said.

The Fed is overwhelmingly expected to leave interest rates unchanged when it concludes a two-day policy meeting on Wednesday.

Investors will pay close attention to the so-called dot plot, a graph representing individual policymakers’ expectations for interest rates. In particular, market participants will be attuned to whether the dots affirm a December forecast that showed Fed officials expect to deliver the equivalent of three rate cuts of a quarter-point each in 2024 or whether they now see fewer cuts on the horizon.

West Texas Intermediate (WTI) crude oil rose to the highest in nearly five months on Monday as Ukraine stepped up attacks on Russian refineries while China reported better-than-expected economic data.

WTI crude for April delivery closed up US$1.68 to settle at US$82.72 per barrel, the highest since Oct.27. May Brent crude, the global benchmark, was last seen up US$1.54 to US$86.88 per barrel.

Ukraine on the weekend launched the latest of a series of drone attacks on Russia's refinery infrastructure, cutting 7% of the country's refining capacity, according to a Reuters report, while keeping geopolitical risk elevated as violence in the Middle East continues.

Along with the attacks, China reported better-than-expected retail sales and industrial-output data even as the country's real-estate sector grapples with a debt crisis. The data raised expectations demand from the No.1 importer will remain firm.