Tonight’s Highlights | Market Bets on Fed Rate Cut Next Week, US Stock Futures Show Mixed Results
On Friday, US stock futures displayed mixed performance, with S&P 500 and Dow Jones futures slightly down, while Nasdaq 100 futures edged higher. Most major European indices also declined.
In the previous trading session, all three major US stock indices hit new closing highs, with the Dow Jones closing above 46,000 points for the first time.
The US August Consumer Price Index (CPI) rose 0.4% month-over-month, exceeding economists’ expectations of 0.3%. However, the year-over-year increase of 2.9% aligned with market forecasts.
This typically critical inflation data was overshadowed by weekly jobless claims. Data showed an unexpected rise of 27,000 in initial jobless claims for the week ending September 6, reaching 263,000—the highest since October 2021—well above the market’s anticipated 235,000.
“Today’s CPI data was overshadowed by jobless claims,” said Seema Shah, Chief Global Strategist at Principal Asset Management, on Thursday.
Shah added, “While the CPI came in slightly above expectations, it won’t give the Fed any pause in announcing a rate cut next week. Instead, the rise in jobless claims will make the Fed feel more urgency in its decision, and Powell might hint at a series of cuts to come.”
Traders view a Federal Reserve rate cut next Wednesday as nearly certain, with a 7.5% chance of a one-time 50-basis-point cut.
As of now, all three major indices are up approximately 1.6% this week. The S&P 500 is on track for its best weekly performance since early August and a fifth gain in the past six weeks. The Nasdaq is poised for a second consecutive weekly rise, while the Dow aims to end a losing streak with its first weekly gain in three weeks.
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