US stock indices rise slightly as expected; market bets on Fed rate cut in September.


The prevailing market sentiment on Wall Street suggests that the Federal Reserve will begin cutting interest rates this September.

On Sunday evening, U.S. stock index futures showed little fluctuation after key inflation data met expectations, driving Wall Street stocks higher. The market is hopeful that the Federal Reserve might still lower interest rates this year.

S&P 500 futures rose 0.1% to 5300.75 points; Nasdaq 100 futures remained flat at 18590.0 points; Dow Jones futures increased by 0.1% to 13830.0 points.

Rate cut expectations rise for September Last Friday, Wall Street indices surged after the Personal Consumption Expenditures (PCE) price index data was released. This index is the Fed's preferred measure of inflation, and April's data met expectations.

The PCE data indicated some easing in inflation, though it remains well above the Fed's 2% annual target.

Nevertheless, this data combined with other recent indicators showing a cooling U.S. economy has led the market to bet on a rate cut by the Fed starting in September.

According to the CME FedWatch tool, traders see about a 47% chance of a 25 basis point rate cut in September, with roughly a 45% chance of the Fed maintaining the status quo. These expectations have propelled U.S. stocks upwards.

Last Friday, the S&P 500 rose 0.8% to 5277.51 points; the Dow Jones Industrial Average climbed 1.5% to 38686.32 points; the Nasdaq Composite Index, hampered by weak tech stocks, was flat at 16735.02 points.

Nonfarm payroll data and Fed meeting approaching Next, the market's attention shifts to the May nonfarm payroll data to be released this week. This data will offer more clues about the labor market, a key factor in the Fed's decision on whether to cut rates.

The Fed will meet next week, and it's expected they will keep rates unchanged. However, any comments regarding future rate decisions will be closely monitored.

In recent weeks, several Fed officials have cautioned that persistent inflation makes them reluctant to start cutting rates.

This week’s focus also includes May's Purchasing Managers' Index data.



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