This reflects not only the impact of recent consumer data and tariffs in the country, but also part of the expectation surrounding the Federal Reserve’s statements. This statement could reshape growth and credit cost projections for the coming months.
Monetary policy balances
U.S. stock index futures were muted on Tuesday as investors awaited earnings reports from major retailers for insights on the health of the American consumer, and a key Federal Reserve conference scheduled later in the week.
Consumer spending accounts for around 70% of the total U.S. economy and traders are keen to know the impact U.S. tariffs have had on corporate forecasts and individual expenditure. Data last week showed the levies had dented consumer confidence in July.
Home improvement retailer Home Depot HD.N inched up in premarket trading ahead of its quarterly results that could also offer clues on the condition of the housing market. Reports from rival Lowe’s LOW.Nas well as big-box retailers Walmart WMT.N and Target TGT.N are due later this week. Intel INTC.O jumped 6.3% after the chipmaker got a $2 billion capital injection from Japan’s SoftBank Group 9984.T. Investors are also waiting for remarks from Fed Vice Chair for Supervision Michelle Bowman later in the day.
Interest rate cuts sustain cautious optimism
Bowman, who is under consideration for the central bank’s top job when Chair Jerome Powell’s term ends next year, has voiced support for at least three interest rate cuts this year to support the labor market, in line with U.S. President Donald Trump’s calls for lower borrowing costs. Interest rate futures point to a total of two rate cuts this year worth 25 basis points each, with the first expected in September, according to data compiled by LSEG.
At 05:30 a.m. ET, Dow E-minis YMcv1 were up 20 points, or 0.04%, S&P 500 E-minis EScv1 were down 0.75 points, or 0.01%, and Nasdaq 100 E-minis NQcv1 were up 4.25 points, or 0.02%. Wall Street’s main indexes have recovered since their April lows, when trade uncertainty stuck global markets, and have picked up steam following a better-than-expected earnings season and on the rate-cut expectations.
The center of global attention
In the European Union, this issue is only getting stronger, without digital protection that restricts innovation. The British example should serve as a warning about balancing online security and freedom, as the European Commission has taken a firm stance in demanding greater accountability from platforms.
The key event this week is the Fed’s annual symposium at Jackson Hole, Wyoming, from Aug. 21-23, where Powell’s comments will be scrutinized for any clues on the central bank’s outlook on the economy and monetary policy. Offering a spot of relief, ratings agency S&P Global affirmed its ‘AA+’ credit rating on the U.S., saying the revenue from President Trump’s tariffs will offset the fiscal hit from his recent tax-cut and spending bill.
The future shows signs of resilience
The current scenario is highly volatile, but despite this, stock market performance demonstrates that investors still maintain, albeit moderate, confidence in the recovery of the American economy. Since the April lows, combined with optimism about interest rate cuts, indexes have been advancing with resilience, especially in the most strategic sectors. The market finds support, even in the face of persistent risks linked to international trade and political uncertainty.
We are currently facing a delicate scenario, reflecting a balance between caution and positive expectations. As the Federal Reserve defines its next steps, corporate earnings reports offer a clearer picture of consumer behavior. Meanwhile, the financial market will continue to adjust its decisions. The situation that began in Jackson Hole has now been magnified! The direction of American monetary policy should set the tone for the remaining months of 2025.
GCN.com/Reuters