Last Updated: 4:01 PM EST
The Federal Reserve may soon cut interest rates again; at least, that is what traders are predicting, as they bet a rate cut will come in June, followed by another in September. This prediction comes after a recent survey showed a significant drop in consumer confidence and a surge in inflation expectations. The Conference Board survey revealed that consumer confidence fell at its sharpest pace in 3.5 years due to growing anxiety over the economic impact of President Trump’s policies.
In addition, inflation expectations rose to 6% – the highest since May 2023. The Fed’s primary goal is to keep inflation at 2%, but policymakers are uncertain about the impact of Trump’s policies on prices, economic growth, and the labor market. As a result, traders are betting on a rate cut in June, with interest-rate futures contracts pricing in a more than 70% chance of a 0.25% decrease.
The Fed’s decision to cut rates will depend on incoming inflation data and labor market trends. A report on Friday is expected to show some progress on the inflation front, with the personal consumption price index estimated to come in at 2.5% in January. However, recent surveys suggest business activity is slowing, which could influence the Fed’s decision.
As a result, stock indices finished today’s trading session mixed. Indeed, the Nasdaq 100 (NDX) and the S&P 500 (SPX) fell % and %, respectively. Meanwhile, the Dow Jones Industrial Average (DJIA) gained %.
First Published: 3:26 AM EST
U.S. stock futures traded mixed on Tuesday morning after a tech-driven sell-off led to declines in major indexes during the previous session. Futures on the Dow Jones Industrial Average (DJIA) and the S&P 500 (SPX) were up 0.09% and 0.04%, respectively, at 3:22 a.m. EST, February 25, while the Nasdaq 100 (NDX) futures were down 0.12%.
On Monday, the S&P 500 and Nasdaq Composite fell 0.5% and 1.2%, respectively, marking their third consecutive day of losses. However, the Dow Jones Industrial Average managed a small gain of less than 0.1%.
In major stock market news, Palantir (PLTR) tumbled 10.5%, continuing its downward trend due to concerns over potential cuts to U.S. defense spending. Also, Nvidia (NVDA) dropped 3.1% ahead of its earnings report due on Wednesday. On the other hand, Apple (AAPL) closed slightly higher after announcing a $500 billion investment in the U.S.
Looking forward, investors are focused on the release of February’s Consumer Confidence report today, due to rising economic and inflation concerns. The Conference Board consumer confidence index is expected to decline to 103 in February from 104.1 in January and 109.5 in December.
On the corporate front, several companies will release their earnings reports today, such as Home Depot (HD), Lucid Group (LCID), AMC Entertainment (AMC), Intuit (INTU), and American Tower (AMT).
Meanwhile, the U.S. 10-year treasury yield was down, floating near 4.342%. Simultaneously, WTI crude oil futures are trending higher, hovering near $70.82 per barrel as of the last check.
Elsewhere, European indices opened mixed on Tuesday following global market losses as the AI-driven rally slowed down. Also, U.S. President Donald Trump said that tariffs planned on Mexico and Canada will be imposed next week, which hurt market sentiment.
Asia-Pacific Markets Traded Lower on Tuesday
Asia-Pacific indices were in the red today due to concerns that Trump’s tariff plans and investment restrictions between the U.S. and China will impact global economic growth.
Notably, Hong Kong’s Hang Seng Index declined 1.36%. Further, China’s Shanghai Composite and Shenzhen Component indices were down 0.8% and 1.17%, respectively. Also, Japan’s Nikkei and Topix indices closed lower by 1.39% and 0.43%, respectively.
Interested in more economic insights? Tune in to our LIVE webinar.