Investors began counting on Fed Chairman Jerome Powell’s speech in Jackson Hole to reset rate cut expectations.
The S&P 500 (^GSPC) rose 0.2%, while the Dow Jones Industrial Average (^DJI) gained nearly 0.4%. The tech-heavy Nasdaq Composite ( ^IXIC ) also rose 0.1%.
Shares are set to consolidate last week’s strong gains in a measure of quiet returns for a market previously upset by worries about a possible recession. Last week’s rally recouped losses accumulated in early August sales — worries eased by encouraging inflation and consumer spending data as Wall Street cracked down on the economy.
Attention has already turned to Powell’s speech at the Fed’s Jackson Hole Symposium on Friday during a quiet week for economic data. As confidence grows in a “soft landing” for the economy — Goldman Sachs now sees a low chance of a recession — the question for investors is not whether the Fed will cut interest rates in September.
As of Monday morning, Traders set prices According to the CME FedWatch tool, there is a 72% chance the Fed will cut rates by 0.25% at that meeting and 28% odds of a 0.50% cut. But Wednesday’s release of minutes from the central bank’s July meeting will fuel those challenges.
Meanwhile, investors will focus on the Democratic National Convention, which begins Monday and may bring more insight into what to expect from presidential candidate Kamala Harris.
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