Intel stock spikes after report of possible US government stake
- US index futures stay near record highs as Bitcoin and Ethereum push further.
- Fed expected to deliver 25bp cut; 50bp reduction appears unlikely without weak jobs.
- Friday focuses on retail sales, consumer sentiment, and geopolitical developments with Trump-Putin meeting.
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US index futures remained supported at record levels with European markets also pushing higher in the first half of Thursday’s session. Underscoring the positive vibes, we saw Bitcoin hit a new record high above $124.5K before profit taking saw it pullback by a couple of thousand dollars, as Ethereum closed in on a new record.
The US dollar continued to remain on the back foot, which saw the USD/JPY pair take a dip to near 146.00. Investors are looking ahead to key PPI inflation data, due for release shortly, with retail sales and the UoM surveys to come on Friday. Dip buying remains the strategy of choice against a backdrop of strong momentum and rising expectations of multiple Fed rate cuts over the next several months.
Fed Unlikely to Go for a 50bp Cut
We’ve still got a fair bit of data to chew over before the Fed next meets — another jobs report, an inflation print, and a smattering of other macro releases. But with that soft labour market reading, hefty downward revisions to previous months, and an inline CPI print this week, the case for a September rate cut is building. In fact, a 25bp trim in September is now fully priced in, with the potential for similar moves in October and December.
Some have been floating the idea of the Fed going bigger, but frankly, it’s a stretch. US Treasury Secretary Bessent reckons a 50bp cut in September is the right call, arguing that rates are a full 150–175bps above where they should be. Trouble is, markets aren’t buying it. Without some clear nod from Fed officials, or an ugly collapse in the jobs numbers, a half-point cut seems firmly in the ‘unlikely’ column.
More Inflation Data on the Way
Tuesday’s CPI didn’t throw up any surprises — headline inflation rose 0.2% month-on-month (2.7% CPI year-on-year), while core CPI climbed 0.3% on the month (3.1% annually). Energy prices eased, food prices went nowhere, and tariff costs are still being absorbed by company margins rather than being passed on to consumers. All told, that gives the Fed the breathing space to shift policy without stoking price pressures.
Next up is PPI — due later today — which will feed into expectations for the Fed’s preferred inflation gauge, core PCE. Forecasts are for a neat 0.2% gain on both headline and core measures last month. That would fit nicely with the view that any inflation bump is still manageable. Weekly jobless claims will also be in focus — especially the continuing claims figure, which jumped to 1.974 million last week.
Friday’s Focus Will Be on Consumers and Geopolitics
Friday’s calendar brings the University of Michigan’s consumer sentiment survey, offering a peek into inflation expectations. But before that, retail sales will drop, and they might prove the bigger market shaker. Expectations are for a modest slowdown in spending growth — confirmation of that could put more pressure on the dollar.
And then there’s the political wildcard — the Trump-Putin meeting on Friday. Hopes are quietly building for a ceasefire in Ukraine and perhaps a longer-term path to peace. That said, it’s a delicate and deeply entrenched situation; optimism is welcome, but realism probably remains the safer bet.
Technical Analysis: Key Levels to Watch on S&P 500 Futures
The S&P 500 remains in a strong bullish trend ever since it bottomed in early April. Every dip since has been progressively shallower and support levels have been defended. Resistance levels get taken out easily. All this shows that buying the dip in an upward trending market is the trade to focus on, regardless of macro factors.
The latest breakout to new highs has left behind several support levels that were formerly resistance. On the S&P 500 futures, these include 6468, 6435 and 6366. Below these levels, prior support at 6245 comes into focus and then the old record high from February at 6166.
On the upside, there is no prior reference points to highlight as potential resistance, so Fibonacci extension levels and round handles are your guides. The 127.2% Fibonacci extension from the downswing that commenced in February comes in at 6529, where we may see some profit-taking around.
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Disclaimer: This article is written for informational purposes only; it does not constitute a solicitation, offer, advice, counsel or recommendation to invest as such it is not intended to incentivize the purchase of assets in any way. I would like to remind you that any type of asset, is evaluated from multiple perspectives and is highly risky and therefore, any investment decision and the associated risk remains with the investor.