Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com

EVERCORE URGES AI TILT AS FED RATE HIKE LOOMS

Markets widely expect the Federal Reserve to raise interest rates at least once this year as inflation remains above its 2% target, potentially marking the start of a tightening cycle under Chair Kevin Warsh and prompting investors to reposition portfolios.

Historical data show stocks tend to sell off roughly 10 days after an initial rate hike, while six- and 12-month forward returns are typically positive but below average, analysts said.

In that environment, investors should stay invested in equities with a tilt toward artificial intelligence, particularly in communication services, consumer discretionary and technology sectors, Evercore analysts led by Julian Emanuel said in an investor note.

They added that investors could complement that positioning by holding more cash, maintaining optionality in the SPDR S&P 500 ETF Trust SPY through October 700 put options, and buying a basket of negative-beta stocks, which tend to move inversely to the S&P 500 .SPX.

(Chibuike Oguh)

*****

EARLIER ON LIVE MARKETS:

SOLID FIRST HALF TILTS ODDS TOWARD FURTHER S&P 500 GAINS - CFRA CLICK HERE

S&P 500 FACES TYPICAL SEPTEMBER PULLBACK DESPITE STRONG SUMMER - BOFA CLICK HERE

MORGAN STANLEY FLAGS FADING MOMENTUM IN CHIP RALLY CLICK HERE

WALL STREET RALLIES AS MIDEAST TENSIONS EASE; DOW EYES RECORD CLOSE CLICK HERE

BIG TECH’S ROUGH JUNE PUTS MAGNIFICENT SEVEN UNDER PRESSURE CLICK HERE

LUXURY SENTIMENT MAKES PEACE WITH SLOWER GROWTH CLICK HERE

COPPER/GOLD RATIO SHOWING SIGNS OF LIFE: CONSTRUCTIVE FOR MINERS? CLICK HERE

ENERGY SET TO ANCHOR EUROPE'S Q2 EARNINGS GROWTH CLICK HERE

EUROPEAN STOCKS HOLD STEADY CLICK HERE

EUROPE BEFORE THE BELL: FUTURES INCH UP CLICK HERE

MARKETS SWIVEL ON TECH, MIDEAST ANGST CLICK HERE