*US equities close higher to end January*

*1 February 2023*
Nasdaq 100 Index 12101.93, (1.59%)↑
S&P 500 Index 4076.7, (1.47%)↑
Dow Jones Indus Avg Index 34086.04, (1.09%)↑

US shares rose after wage data provided more indications of peak inflation, supporting risk-on sentiment just as the Fed kicked off its 2-day meeting. The *Nasdaq* had its best month since July and strongest start to a year since 2001. The *10-year Treasury yield* fell to around 3.51%. All 11 sectors closed in the green, with *Materials* and *Consumer Discretionary* leading shares higher. The *VIX (-2.91%)* decreased to 19.39.

Adding to the peak inflation narrative, the *US Employment Cost Index*, which is the Fed’s preferred wage inflation measure, fell more than expected to 1.0% in Q4, down from 1.2% in Q3. This adds to the case for less monetary tightening, although it is unlikely to significantly alter the Fed's hawkish rhetoric. The *Conference Board Consumer Confidence Index* dropped more than expected to 107.1 from 109.0.

All eyes will be on the *Fed's interest rate decision tommorow at 03:00 Singapore time*; where a 25bps hike is widely expected. Investors will be scrutinizing *Fed Chair Jerome Powell’s post policy meeting press conference at 03:30 Singapore time* for any hints on the future path of rate hikes. Focus will then shift to *Nonfarm Payroll data set to be released Friday, 21:30 Singapore time*.

*General Motors (+8.35%)* and *UPS (+4.67%)* both surged after beating top and bottom line estimates. *Spotify Tech (+12.72%)* jumped on strong growth in revenue, monthly active users, and premium subscribers. *McDonald’s (-1.29%)* fell after warning that inflation will weigh on 2023 margins. *Caterpillar (-3.52%)* dropped after reporting its first quarterly earnings decline of 29% since 2020. *Exxon Mobil (+2.16%)* gained after posting full-year profit of $59B, the highest ever for the western oil industry. After hours, *Snap (-14.32%)* plunged after forecasting revenue to decline as much as 10% in the current quarter.