U.S. stock futures climbed Friday ahead of a crucial speech by Federal Reserve Chairman Jerome Powell that is expected to shape expectations about politics, the economy and the future path of interest rates.
S&P 500 futures (ES=F) rose 0.5%, while Dow Jones Industrial Average (YM=F) futures gained 0.3%. Contracts for the tech-heavy Nasdaq 100 (NQ=F) led the way, up about 0.8%, with all three indexes eyeing a comeback from Thursday’s closing losses.
Spirits have turned optimistic as the day of reckoning for rate cut bets finally arrives, after a week of growing anticipation for what Powell will reveal in his comments Friday morning in Jackson Hole.
Slowing economic data has the market positioning for a Fed rate cut in September, with opinions split on how deep the cut would be. Traders are pricing in a 75% chance of a 25 basis point cut and a 25% chance of a 50 basis point cut, according to Fed data. The CME FedWatch Tool.
Learn more: Fed forecast for 2024: What experts say about the possibility of a rate cut
Powell’s speech at 10 a.m. ET could test that confidence, though some believe the Fed chief will avoid short-term guidance to focus on broader issues. History suggests Powell will play it safe and likely spare the market a shock.
The benchmark 10-year Treasury yield (^TNX) was steady at around 3.85% in early trading ahead of the Fed chief’s appearance.
Meanwhile, investors absorbed the surprise departure of Nestle (NSRGY, NESN.SW) CEO Mark Schneider, which put pressure on shares of the world’s largest food maker.
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