Wall Street and Global Markets Rise as Weak Jobs Data Fuels Fed Cut Expectations
Global markets climbed for a second consecutive day on Tuesday, on optimism that the U.S. Federal Reserve could cut rates as early as next month. U.S. futures were trading higher, with the Dow Jones Industrial Average up 0.3%, the S&P 500 gaining 0.4%, and Nasdaq up by 0.4%.
In Europe, the STOXX 600 index was up 0.4% in early trade, while Asia’s MSCI Asia-Pacific index outside Japan advanced 0.8%. South Korea’s KOSPI jumped 0.8%, while Japan’s Nikkei slipped 1.6%, partly due to a stronger yen. Chinese blue-chip stocks stayed flat.
US markets rallied Monday as investors took favorably to better-than-expected earnings and rising expectations of a September rate cut. The optimism was due to a weaker job data report released on Friday that showed slowing growth of the US economy, leading to expectations that the Fed would step in to support the economy.
Trade Moves by Trump Alarm Geopolitical Leaders
US President Donald Trump Threatens To Increase India’s Tariffs In Response To Ongoing Oil Trade With Russia. India strongly condemned the criticism and said it would continue to defend its economic interests.
Trump also created a stir when he dismissed the head of the U.S. Bureau of Labor Statistics, which produces the jobs report. The announcement prompted questions about the politicization of government data and followed a lackluster jobs report on Friday.
Compounding the unease is that Trump has the chance to nominate a new Federal Reserve governor after Democrat Adriana Kugler stepped down early from the Fed. Some analysts fear the development could impair future Fed decisions, with Trump already badgering Fed Chair Jerome Powell to cut rates.
Investors Focus on Central Banks and Earnings.
Expectations for a September rate cut now stand at 94%, up from 63% in late July, according to the CME FedWatch Tool. The Bank of England is also forecast to reduce interest rates this week, even as inflation remains stubbornly high in the UK.
Investors also have earnings from Disney and Caterpillar to digest. On Monday, tech stocks like Nvidia, Alphabet, and Meta boomed. The AI tools supplier also upped its full-year revenue guidance on the back of strong demand.
Commodities and Currency Market Update
The dollar index was up 0.34%, having stabilized after two straight days of declines. The single currency was down 0.25% to $1.1543, and the dollar strengthened to 147.6 yen. OPEC+ supply boost sends Brent crude oil down 1% at $68.05 per barrel. Bitcoin inched 0.6% lower to $114,235, with gold bouncing back from profit-taking selling to trade just behind the precious metal at $3,375 per ounce.
