Wall St futures rise after Aug gains as Fed rate cut hopes build

Investing.com-- U.S. stock index futures edged higher on Sunday evening after Wall Street saw another monthly rise in August, buoyed by growing bets of a Federal Reserve rate cut later this month.

S&P 500 Futures were up 0.2% at 6,488.25 points by 20:53 ET (00:53 GMT). Nasdaq 100 Futures gained 0.3% to 23,539.75 points, while Dow Jones Industrial Average also rose 0.3% to 45,725.0 points. 

US markets will be closed for regular trading on Monday due to a public holiday.

Wall Street upbeat on Fed cut hopes

On Friday, the S&P 500 fell 0.6%, the NASDAQ Composite declined 1.2%, and the Dow Jones Industrial Average edged dowm 0.2%. They were dragged by weakness in tech stocks after Nvidia’s results.

Still, Wall Street indexes closed out August with another monthly advance, supported by growing bets that the Fed is preparing to ease policy for the first time this cycle.

Traders now see an 89% chance that the Fed will lower its benchmark rate by 25 basis points at the Sept. 16-17 meeting, according to CME FedWatch data. 

Expectations were reinforced after Fed Chair Jerome Powell said at the Jackson Hole conference that policymakers were prepared to adjust policy if inflation continued to moderate and the labor market showed signs of cooling. 

Fed Governor Christopher Waller also said last week that he supported starting rate cuts in September, followed by additional easing over the next three to six months.

Data released earlier Friday showed that the core PCE price index, the Federal Reserve’s preferred gauge of inflation, rose 0.3% on a monthly basis, putting the annual rate at 2.9%, its highest level in five months.

This was in line with expectations, suggesting that U.S. President Donald Trump’s sweeping tariffs were not filtering excessively into consumer prices, despite a recent upside surprise in producer inflation.

Fed independence worries remain; jobs data awaited

Political developments are also drawing investor attention. President Donald Trump’s attempt to dismiss Fed Governor Lisa Cook has triggered legal challenges and revived concerns about the central bank’s independence.

Analysts say the turmoil could affect how markets interpret upcoming policy moves.

Attention now turns to Friday’s nonfarm payrolls report for August, which will be among the final major data points released before the Fed meeting.

A further slowdown in hiring or wage growth would likely strengthen the case for a September cut, while a stronger-than-expected print could complicate the Fed’s decision.