Here are five key things investors need to know to start the trading day:
It’s looking more and more likely that the Federal Reserve will soon start cutting rates, and investors are thrilled. After this week’s cooler-than-expected consumer inflation report, Fed funds futures now forecast a nearly 100% chance that the central bank will decrease the borrowing cost at its next policy gathering in September, according to CME’s Fed Watch tool. That’s good news for traders, who have been waiting with bated breath for a cut since late last year. Small-cap stocks — which are seen as beneficiaries of a lower-rate environment — rallied in Wednesday’s session as a result. The good vibes didn’t stop there: The S&P 500
and Nasdaq Composite also notched new all-time closing highs for a second day in a row. Investors will get more inflation data Thursday morning, with July’s producer price index due in at 8:30 a.m. ET. Follow live market updates here.
Speaking of the Fed, CNBC’s Steve Liesman on Wednesday reported that President Donald Trump is now considering 11 candidates to succeed Jerome Powell after the Fed chief’s term expires next year. Those names, according to two administration officials, include outsiders David Zervos, chief market strategist at Jefferies, and Rick Rieder, chief investment officer for global fixed income at BlackRock. Fed Governors Michelle Bowman and Chris Waller, who advocated for rate cuts at the central bank’s last meeting, are also in the running. Prediction markets warmed up to the idea of Zervos taking the role following CNBC’s report, with his odds on Kalshi shooting higher Wednesday.
