Dow futures ticked up in early trade Wednesday, helped by growing chatter that the Federal Reserve could cut interest rates in September. The move was modest at about 135 points, but it comes on the heels of a strong day for Wall Street.
On Tuesday, the Dow closed higher alongside fresh record finishes for both the S&P 500 and Nasdaq, after inflation numbers came in a touch cooler than expected.
That data has given investors more reason to believe the Fed might finally start easing policy later this year.
For now, traders are sifting through economic reports and keeping a close eye on consumer price trends. While nobody’s calling it a done deal, the prospect of lower rates is giving stocks an extra bit of fuel in the premarket.
5 things to know before Wall Street opens today
1. Traders are now almost certain the Federal Reserve will trim rates in September, with odds of a quarter-point cut climbing to roughly 98%.
The shift comes after July’s inflation numbers stayed tame and the latest jobs report painted a weaker picture of the labor market, including downward revisions for May and June hiring.
That combination has only strengthened the case for easing, and markets are already positioning ahead of the Fed’s mid-September policy meeting.
2. Fresh inflation data suggests price pressures remain mostly in check, even as some service costs prove stubborn. Core inflation did edge a bit higher, sending a more mixed message.
For the Fed, the decision now comes down to balancing those inflation risks with signs of a cooling job market. Another soft employment report in August could be the final push needed to lock in a rate cut.
3. Much of the market’s recent muscle has come from the so-called “Magnificent 7” tech giants, whose gains have been doing the heavy lifting for major indexes. Outside of big tech, action has been more uneven.
Home Depot extended its intermediate uptrend, adding to recent momentum, while names like Adobe and Salesforce ran into resistance and slipped below key support levels.
These cross-currents highlight a market in rotation, with investors taking a more selective approach as they position themselves ahead of the opening bell.
4. The S&P 500 just notched a fresh record, topping 6,427, and it’s still riding what technicians call an Elliott Wave impulse pattern.
We’re now in wave five, the last stretch of the cycle, which often still has some gas left in the tank before momentum slows.
That doesn’t mean it’ll be a straight climb. Small dips are part of the game here, but unless the index slips under roughly 6,212, the broader uptrend looks safe.
Indicators like RSI and MACD are still leaning bullish, suggesting the rally has room to run, even if it takes a few breathers along the way.
5. The CBOE Volatility Index, or VIX, is sitting near 14.7, low enough to signal a pretty calm market mood.
Options pricing points to an expected daily swing of about 22 points on the S&P 500, roughly 0.34%. That’s not nothing, but it’s hardly a sign of panic.
For now, the backdrop looks steady, with traders showing little appetite for big defensive moves.
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