As investors eagerly anticipate Federal Reserve chair Jerome Powell’s speech at the upcoming Jackson Hole symposium, US stocks remained steady on Monday following a week of solid gains. The S&P 500, Dow Jones Industrial Average, and Nasdaq 100 futures all saw little movement, with the S&P 500 holding near record highs.
Last week’s market rally helped to erase losses from an early August sell-off, calming fears of an impending recession. Positive inflation and consumer spending data further bolstered confidence in a “soft landing” for the economy, with Goldman Sachs even lowering the likelihood of a recession.
With growing certainty that the Fed will lower interest rates in September, the focus now shifts to the magnitude of the rate cut. Traders are currently pricing in a 72% chance of a 0.25% cut and a 28% probability of a 0.50% cut at the upcoming Fed meeting. The release of minutes from the July meeting on Wednesday could potentially influence these expectations.
In addition, investors will be closely monitoring the Democratic National Convention, which begins Monday and could provide insights into the policies and potential impact of presidential nominee Kamala Harris.
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