US stock futures remained stable late Thursday as Wall Street evaluated the state of the US economy from a record high, ahead of the Federal Reserve’s anticipated interest rate decision next week. Futures for the Dow Jones Industrial Average saw a slight increase of 0.1%, while those connected to the S&P 500 and the tech-focused Nasdaq edged above the flatline. All three major indexes reached record levels on Thursday, with the Dow closing above 46,000 for the first time.
Investors have been analyzing several weeks’ worth of economic data for insights into the Fed’s forthcoming decisions. Recent reports highlighted significant weaknesses in the labor market, with more than 20,000 jobs added last month and initial jobless claims reaching a near four-year peak. Concurrently, inflation pressures remain persistent, as consumer prices increased last month, revealing signs that tariffs imposed during the Trump administration are impacting the economy. Nevertheless, investors are optimistic that inflation levels are manageable enough for the Fed to consider a cut in interest rates next week.
Currently, traders are forecasting an over 90% likelihood of a quarter-point reduction at the Fed’s meeting in September. Looking ahead, there is about an 80% expectation that the central bank will implement cuts equivalent to three times before the year concludes.
On Thursday, the bond market reflected a similar trend; Treasuries also experienced gains. The yield on the 10-year Treasury fell to nearly 4%, close to its lowest mark this year, while the 30-year yield dropped below 4.65%, having recently touched the 5% mark. Gold prices have reached new records as well.
As the market gears up for the Fed’s decision in the coming days, Friday is set to unveil the initial readings of consumer sentiment for the month from the University of Michigan. While indications suggest that consumer spending remains stable, there is growing concern among Americans regarding their purchasing power and the overall job market outlook.
