Wall Street Set for Gains as Rate-Cut View Mounts – Europe Market Wrap

Following two days of trembling, Wall Street was expected to open stronger as optimism about interest rate cuts by the Federal Reserve and other central banks in the upcoming months grew.

As traders awaited confirmation of the picture of decreasing prices from PCE inflation, a measure frequently monitored by the Fed, contracts on the Nasdaq 100 Index increased 0.7% and those on the S&P 500 jumped 0.4%. As euro-area inflation slipped to a three-year low, Europe’s main stock index surged to a new high, strengthening the argument for a rate cut by the European Central Bank in September.

The majority of data suggests that the Fed has controlled inflation without sending the economy into recession, meaning that global equities are poised for a fourth month of gains. Even if analysts predict a modest increase in the year-over-year PCE figure later on Friday, the outlook for a September rate decrease is not expected to be jeopardised.