Key points
- US stock futures increased on Thursday morning, anticipating a Federal Reserve interest rate cut.
- August’s Consumer Price Index (CPI) data met expectations, reinforcing the prediction of a rate cut.
- Initial jobless claims rose significantly, suggesting a softening labor market.
- Adobe and Kroger are set to release earnings reports, with varied investor sentiment.
US stock futures experienced a surge on Thursday morning, fueled by anticipation of a Federal Reserve interest rate cut next week. The Dow Jones Futures, S&P 500 Futures, and Nasdaq 100 Futures all saw gains, indicating investor optimism. This follows Wednesday’s mixed performance, with the S&P 500 and Nasdaq Composite reaching record highs while the Dow Jones Industrial Average declined slightly.
The positive market sentiment is largely attributed to the August Consumer Price Index (CPI) data, which aligned with economists’ predictions. The CPI showed a year-on-year increase of 2.9%, and a month-on-month increase of 0.4%, further supporting the case for a Fed rate reduction.
This followed Wednesday’s Producer Price Index report, which showed easing wholesale price pressures, also contributing to the positive market outlook.
Further bolstering expectations for a rate cut was a significant increase in initial jobless claims. The Labor Department reported a jump of 27,000 claims, reaching a seasonally adjusted 263,000 for the week ended September 6th. This suggests a potential softening of the labor market, which strengthens the argument for a more accommodative monetary policy from the Federal Reserve.
The upcoming earnings season will also impact market dynamics. Software giant Adobe is slated to release its quarterly results, facing mixed investor sentiment due to concerns about cyclical and secular headwinds.
Conversely, Kroger, a major US grocery chain, saw its stock rise premarket after announcing an upward revision of its annual core sales forecast, citing resilient demand for its lower-priced products. Oil prices, however, experienced a decline due to weak US demand and a reported increase in crude inventories, adding a note of caution to the overall market optimism.
