Most economists believe the Fed will cut rates at its meeting next week after recent data revealed a labor market that's been softening for longer than previously thought. While inflation also remains stubbornly above the U.S. central banks 2% target and is forecast to have risen again in August, Fed officials have increasingly expressed concern about a slowing U.S. job market.
Wall Street expects the Fed to cut rates by 0.25% next week, though some are speculating Jerome Powell could deliver a "jumbo" 0.5% move, given how weak recent labor market data has been. Global markets and U.S. S&P 500 futures rose on expectations of cheaper money, but there are still two more rounds of inflation data prior to the Fed's call.
U.S. equities faced a notable decline, with the Dow falling 1.32% amid rising geopolitical tensions in the Middle East, reversing earlier market optimism.
