"Despite mounting concerns over a weakening labour market and tariff-related costs, investors have embraced what is described on Wall Street Journal as a "run it hot" trade, betting that rate cuts and tax stimulus will generate a new wave of economic growth and corporate earnings. This optimism has pushed benchmarks, speculative tech names, meme stocks, and even alternative assets like gold to fresh highs."
"Consumer prices rose 2.9% year-on-year in August, accelerating from 2.7% in July, still above the central bank's 2% target. At the same time, labour market weakness is becoming harder to ignore. Last week's jobless claims surged to 263,000, the highest since October 2021, and well above expectations. The mix of persistent inflation and rising unemployment filings deepens the debate over how aggressively the Fed should ease, with traders largely convinced that supporting employment now outweighs the risks of slightly elevated inflation."
Stock futures rose, with S&P 500 E-mini up 0.17% and Nasdaq 100 futures up 0.13% after both indices hit record highs. Early gains reflect expectations for easier Federal Reserve policy, which supports bullish momentum across benchmarks, speculative tech, meme stocks, and gold. Investors are pursuing a "run it hot" strategy, betting that rate cuts and tax stimulus will spur growth and corporate earnings. Attention centers on the Fed's updated dot plot and Chair Powell's language, which could be market-moving. Incoming data show inflation at 2.9% year-on-year in August and rising jobless claims, complicating decisions on easing.
Read at London Business News | Londonlovesbusiness.com
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