US Futures Inch Higher as Traders Assess Rate Path – Europe Market Wrap

Monday saw a little increase in US futures as traders evaluated the effects of a policy easing by the Federal Reserve in the wake of Chair Jerome Powell’s dovish remarks.

Futures for the S&P 500 and Nasdaq 100 increased by roughly 0.2% apiece following advances of over 1% for both indices on Friday. The case for an interest rate cut next month has largely been made thanks to Powell’s Jackson Hole address, but the focus now is on the scale of the cut and what it would mean for the status of the economy.

Financial markets began to position for cheaper US borrowing prices after Fed Powell declared that the “time has come” to switch to monetary easing. Investors increased their bets on a half-point rate cut in September, but such a decrease could indicate that the economy is headed for a rough landing, which would reduce demand for stocks.

Following an Israeli raid on Hezbollah targets in southern Lebanon, some refuge buyers were spurred by fears of the crisis in the Middle East intensifying. Crude oil saw a gain of almost 1%. For the second day in a row, the yen rose to its highest level since January.