Market News by OnEquity

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1

Dollar Falls Ahead of Fed Meeting, Pound Slides

During the early part of the European trading session, the US dollar retreated, supported by a safe-haven bid, as tensions escalate in the Middle East, while sterling retreated ahead of the Bank of England’s monetary policy meeting this week. Here is what is happening in the forex market today.

Dollar Rises Amid Middle East Tensions

The safe-haven dollar gained support on Monday after a deadly rocket attack over the weekend on the Israeli-occupied Golan Heights.

The attack, which left at least 12 people dead, was blamed by both Israel and the US on Hezbollah, backed by Iran, which denied responsibility.

Israel vowed to take retaliatory action against Hezbollah in Lebanon, and Israeli jets attacked targets in southern Lebanon on Sunday.

However, these developments are minor, and most attention is now focused on the Federal Reserve’s meeting next Wednesday.

Although the Fed is widely expected to leave rates unchanged this week, the expectation of a rate cut has increased, according to some market economists.

The primary factor bringing the FOMC closer to a cut is the positive inflation data for May and June. After firmer inflation figures in Q1, largely supported by residual seasonality and normal month-on-month movement, Q2 showed considerable improvement in inflation data.

Pound Falls, Rate Decision on Hold

In Europe, the GBP/USD fell 0.5% to 1.2809 ahead of the Bank of England meeting on Thursday.

The chances of the central bank starting a rate-cutting cycle later this week are seen as a toss-up, as policymakers have to balance higher-than-expected services price inflation with weak growth.

The EUR/USD fell 0.2% to 1.0836 on the likelihood that the European Central Bank will cut rates again this year, following the June cut.

Analysts are also pointing to the release of some first-tier eurozone data later in the week. Tomorrow’s second-quarter GDP report is expected to show year-on-year growth of 0.5%, but Wednesday’s preliminary CPI estimate is expected to have the biggest impact on the market. The latest Central Bank meeting has put a greater focus on data dependency.

BOJ Meeting Approaching

In Asia, USD/JPY was barely up at 153.75, approaching its lowest levels in nearly three months ahead of this week’s Bank of Japan meeting.

Market analysts disagree on whether the central bank will raise interest rates by about 10 basis points or leave them unchanged. The Bank of Japan will also provide more details on how it plans to begin tapering its asset purchases.

The USD/CNY was up about 0.1% at 7.2584 after speculation of government intervention sparked sharp swings in the yuan last week.

2

US Stock Markets Rise Ahead of Federal Reserve Meeting and Major Tech Company Results

US stock index futures rose on Monday, kicking off a week that includes a Federal Reserve meeting and crucial results from major tech companies. Here’s what’s happening in the stock market today.

Wall Street indices rallied strongly on Friday after the PCE price index, the Federal Reserve’s favored inflation gauge, came in mostly in line with expectations in June, increasing optimism that the central bank may start cutting rates in September.

The S&P 500 rose about 1.1%, the NASDAQ Composite gained 1%, and the Dow Jones Industrial Average rose more than 650 points, up about 1.6%.

Federal Reserve Meeting Will Provide More Clarity on Rate Cuts

The US Federal Reserve is expected to leave interest rates unchanged at the end of its two-day meeting on Wednesday.

Any signal from the central bank about when it plans to start cutting interest rates will be closely watched, amid growing signs that inflation has cooled in recent months.

According to economists, recent comments from Fed policymakers indicate that they are likely to hold interest rates at their next meeting, but the likelihood of a rate cut has increased.

The main factor moving the FOMC closer to a cut is the positive inflation data for May and June. After firmer inflation figures in the first quarter, largely attributed to residual seasonality and typical month-on-month fluctuations, the second quarter saw considerable improvement in inflation data.

According to the CME FedWatch tool, traders expect a 25 basis point rate cut by the Fed in September.

Apple and Microsoft Report Earnings This Week

Microsoft (MSFT) and Apple (AAPL) will report their results on Tuesday and Thursday, respectively.

Other major technology companies such as Meta Platforms (META), Advanced Micro Devices (AMD), and Amazon (AMZN) will also release their results this week.

The results come after a long slide in technology stocks, as the sector was hit by profit-taking and rate cut expectations, causing investors to shift to more economically vulnerable sectors.

Alphabet’s (GOOGL) poor results last week also led to increased caution ahead of the technology sector’s results, with investors waiting to see if increased investment in artificial intelligence is paying off.

Looking ahead to Monday, earnings from fast-food giant McDonald’s (MCD) will be the most relevant.

Crude Oil Falls Despite Middle East Tensions

Crude oil prices fell on Monday despite concerns about the escalating conflict in the Middle East, which could impact global supply.

Israel and the United States blamed the weekend’s deadly rocket attack in the Israeli-occupied Golan Heights on Iranian-backed Hezbollah, which denied responsibility.

Israel vowed retaliation against Hezbollah in Lebanon, and Israeli aircraft bombed targets in southern Lebanon on Sunday.

These heightened tensions are also seen as diminishing the chances of a ceasefire between Israel and Hamas.

Nevertheless, the crude oil market remains weak as demand continues to be threatened by global economic fragility.

3

Bitcoin Price Today: Back to $70,000 on Trump’s Announcement of More Favorable Regulation

The price of Bitcoin surged on Monday, extending gains made over the weekend after Republican presidential candidate Donald Trump raised the likelihood of more favorable regulation during his speech at the Bitcoin Convention.

Although the cryptocurrency initially reacted somewhat negatively to Trump’s speech, mainly because he stopped short of specifically promising a national reserve, buyers stepped in shortly afterward.

Bitcoin rose 3.3% in the last 24 hours to around $69,645.20.

Trump Promises Looser Regulations, Race with China

Trump mentioned on Saturday during the Bitcoin Conference that the United States should become the world leader in cryptocurrencies ahead of China and that he would implement looser regulations than Democratic presidential candidate Kamala Harris.

Trump signaled that he would create a cryptocurrency advisory council for the White House and establish a national Bitcoin reserve using the US government’s current holdings, most of which were seized for law enforcement activities.

“Never sell your Bitcoin. If elected, it will be the policy of my administration, the United States of America, to hold 100% of all Bitcoin that the United States government currently owns or acquires in the future,” Trump stated.

Trump, who in 2021 called cryptocurrency a scam, has courted the sector in his recent election campaign. His campaign accepts donations in cryptocurrencies, and the former president has also launched his own collection of non-fungible tokens.

Trump also vowed to fire Securities and Exchange Commission Chairman Gary Gensler, who has been on a regulatory crusade against the cryptocurrency industry.

Recent polling data indicated that Trump is poised for a close race with Harris, who so far has not outlined any plans for regulating additional crypto assets such as Ethereum. Given her past as a prosecutor with expertise in financial fraud, it seems possible that Harris will follow through on the government’s strong crackdown on cryptocurrencies.

Bitcoin’s price benefited from speculation about a Trump presidency, bouncing sharply in the past two weeks from four-month lows. However, further gains in the token remain doubtful, as the defunct Mt. Gox cryptocurrency exchange continues to mobilize its Bitcoin holdings for distribution.

Cryptocurrency Prices Today: Altcoins Advance with Rate Cuts in Focus

Cryptocurrency prices generally advanced on expectations of more favorable US regulations. Speculation about US interest rate cuts ahead of this week’s Federal Reserve meeting also supported risk assets.

The second-ranked token in the cryptocurrency market, Ether, rose about 4.8% to approximately $3,375.63, on increased interest following last week’s launch of spot exchange-traded funds that track the token.

4

Market Highlights for the Week: Rates, Earnings, BoE

This week will be decisive for markets, with monetary policy meetings of the Federal Reserve, the Bank of England, and the Bank of Japan. Additionally, Friday will see the release of the US employment report and the results of major technology companies. Here is a summary of what to expect in the markets this week.

Federal Reserve Decision

With markets currently pricing in an 88% chance of a rate cut in September, amid signs of slowing inflation and rising unemployment, this week’s policy decision by Fed Chairman Jerome Powell will be closely watched. The Fed, which concludes its July policy meeting on Wednesday, has stated it wants to ensure inflation is moving sustainably toward its 2% target before cutting interest rates.

Friday’s inflation data reinforced expectations that the US central bank will lay the groundwork for a rate cut in September this week. The Fed has held its benchmark overnight rate since July last year at between 5.25% and 5.50%. Since 2022, it has raised the policy rate by 525 basis points.

Non-Farm Payrolls

The Fed’s statement on Wednesday will subject the already closely watched non-farm payrolls report to even greater scrutiny on Friday, as investors try to determine whether the latest signs of cooling in the labor market held up in July. The US economy is expected to have added 177,000 jobs in July, down from 206,000 in the previous month.

The unemployment rate, which has risen in the past three months, is expected to stabilize at 4.1%. On Tuesday, ahead of Friday’s report, JOLTS data on job openings will be released in the US.

Tech Giants’ Results Continue

Tech giants’ results will continue to be released in the coming days, and potential disappointments could further unsettle markets already concerned over high stock valuations. Microsoft (MSFT) is scheduled to report its results on Tuesday, Facebook parent Meta (META) on Wednesday, and Apple (AAPL) and Amazon (AMZN) on Thursday. Disappointing numbers could reignite the concerns that caused a massive sell-off in US stocks on Wednesday, a day when both the S&P 500 and Nasdaq experienced their worst day since late 2022.

The sharp rise in tech stocks may have set the bar too high for their results.

Alphabet (GOOGL), the parent of Google, whose revenues were one of the triggers for the massive sell-off, actually reported better-than-expected earnings. However, investors worried that increased spending on AI infrastructure could compress margins, causing shares to fall 5%.

Bank of England Meeting

The Bank of England meets on Thursday, with investors undecided on whether policymakers will make their first rate cut since 2020.

The degree of uncertainty is higher than usual ahead of the meeting, as senior central bank officials have not spoken publicly for more than two months because of rules in the run-up to Britain’s July 4 general election.

Investors have been speculating about whether recent higher-than-expected services price inflation is enough to prevent the Bank of England from cutting interest rates from their 16-year high of 5.25%. Last month, the Bank of England’s Monetary Policy Committee voted 7-2 in favor of holding rates, but the minutes of the decision made it clear that it had been a ‘finely balanced’ decision for some policymakers who did not vote for a cut.

Bank of Japan Decision

The Bank of Japan concludes its latest policy meeting on Wednesday, and speculation about the possibility of a rate hike is growing as key policymakers, including the Prime Minister, have suggested the need for some near-term normalization of monetary policy. The weakening yen, which affects household and business spending, has made the exchange rate one of the central issues at the Liberal Democratic Party’s leadership convention in September.

A surprise rally of 10 yen to the dollar from three-decade lows earlier this month has not stopped some from predicting a hike in July. They argue that the Bank of Japan can get the most bang for its buck by hiking with a recovering yen. Others worry that a fragile economy and weak consumer sentiment cannot sustain higher borrowing costs, with slowing US growth causing a drag effect.

5

Dollar Steady Ahead of Fed Meeting; Traders Remain on Alert

The US dollar was trading flat on Tuesday as traders were inclined to be cautious and on alert ahead of the start of the Federal Reserve’s latest interest rate meeting. Here is what is moving the currency market today.

Dollar quiet ahead of Fed meeting

The Federal Reserve begins its two-day policy meeting on Tuesday and is expected to leave rates unchanged the following day.

The US central bank is expected to keep rates unchanged this week, although traders will be watching for any hints from Fed Chairman Jerome Powell on how soon policymakers will agree to cut rates at his press conference.

Weak inflation readings coupled with dovish comments from Fed policy makers have led markets to increase bets that September is likely to be the start of the game, with a cut of around 25 basis points.

Likewise, Powell has the Jackson Hole meeting of central bankers in August, in the absence of a Fed meeting that month, to further lead the market, but if he does not give clear signals on a September cut this week, it is likely to lead to a strengthening of the dollar and US Treasuries.

Pound falls on BoE uncertainty

In Europe, GBP/USD was barely down at 1.2857 ahead of Thursday’s Bank of England meeting.

There is a lot of uncertainty surrounding this meeting, as key policy makers have not spoken openly in two months due to the rules in the run up to the general election earlier this month.

Policy makers have to weigh and judge between higher than estimated services price inflation and weak growth, with an unchanged resolution a marginal favourite at the moment.

EUR/USD rose 0.1% to 1.0829 after the release of mixed euro zone growth data.

France’s economy grew marginally stronger than estimated in the second quarter, by 0.3% in the three months to the end of June.

However, this relatively positive news was overshadowed by a surprising contraction in Germany’s economy in the second quarter, which contracted 0.1% in the second quarter compared to the previous three-month period.

Yen loses some of its gains

In Asia, USD/JPY rose about 0.5% to 154.78 and the yen gave up some of its gains ahead of the Bank of Japan’s meeting on Wednesday.

Analysts are diverging on whether the central bank will keep interest rates unchanged or go for a 10-15 basis point hike.

However, apart from interest rates, the Bank of Japan is expected to show signs of strength and end its quantitative easing policy. At its June meeting, the central bank had stated that in July it would set out its plans to phase out its asset purchase programme.

The USD/CNY was down 0.1% at 7.2496, near an eight-month high, amid continued concerns about slowing economic growth in the country.

6

US stocks rise; caution ahead of Fed meeting, Microsoft results

U.S. stocks rose on Tuesday in a cautious environment ahead of the Federal Reserve meeting and the release of results from some of the largest U.S. companies. This and much more is happening in the stock market.

Fed meeting is awaited for more clues on interest rates.

Markets are on edge ahead of the Federal Reserve’s latest meeting, due to start late Tuesday and end Wednesday.

The central bank is expected to leave interest rates unchanged, although after June’s benign inflation report, investors will be looking for Fed President Jerome Pwell to lay the groundwork for a rate cut in September.

Fed officials have repeatedly stated that they are looking for more evidence that inflation is steadily returning to 2% before cutting rates, although Powell signalled earlier this month that the Fed may not wait until inflation achieves this prior rate cut target.

Markets have fully priced in a 25 basis point cut in September, with a slight possibility of a near 50 basis point reduction, and have priced in 66 basis points of easing by the end of the year.

Microsoft begins next round of big tech results

There are still more key results to digest this week, starting with Microsoft (MSFT), which will release its June quarter results on Tuesday after the bell rings and the trading day begins.

Although the company is expected to post considerable profit growth on the back of new AI-related products, investors will be paying close attention to rising expenses and demand for artificial intelligence to be enough of a driver for it to post a profit.

The increased caution comes after high artificial intelligence spending and sluggish revenue metrics last week marred strong earnings results from peer Alphabet (GOOGL).

In addition to Microsoft, technology heavyweights Meta Platforms (META) and Apple (AAPL) will release their earnings reports on Wednesday and Thursday, in that order.

Advanced Micro Devices (AMD), Merck (MRK), Procter & Gamble (PG) and Pfizer (PFE) are also due to report results.

Labour market data

A number of labour market data will be released this week, starting on Tuesday with job postings for the month of June.

On Friday, July nonfarm payrolls will be released, which is expected to indicate that the US economy added about 177,000 jobs in July, down from 206,000 last month.

The release will be under close scrutiny by investors, who will be looking to see if recent signs of cooling in the labour market continued in July, which could have some influence on when the Federal Reserve begins to cut interest rates.

Crude oil prices fall

Crude oil prices fell on Tuesday, nearing two-month lows, on concerns about demand in China, the world’s biggest crude importer, as traders ignored the risk of an escalation of conflict in the Middle East.

Traders dismissed the risk premium in crude oil after media reports that Israeli authorities did not intend to start an all-out war with Lebanon in response to a rocket attack that killed 12 people in the Israeli-occupied Golan Heights.

The Organisation of Petroleum Exporting Countries is meeting this week to discuss production levels, although recent weakness in crude oil could lead the cartel to play down any plans to cut output.

7

Dollar Falls Ahead of Fed Decision, Yen Rises on BOJ Hike

The U.S. dollar declined on Wednesday in anticipation of the Federal Reserve’s latest interest rate meeting, while the Japanese yen soared after the Bank of Japan decided to tighten monetary policy. Below, we will discuss what is happening in the currency market.

Dollar Loses Ground Ahead of Fed Decision

The Federal Reserve ends its two-day meeting today, Wednesday, and is expected to leave interest rates unchanged.

The Fed is widely expected to keep rates unchanged this week, but the dollar is showing signs of weakness as traders expect Fed Chairman Jerome Powell to set the stage for a rate cut at the next meeting of the U.S. central bank.

For many analysts, it is certain that Powell will reiterate a tone of voice marked by caution regarding inflation, but he has often been the voice of a more dovish faction of the FOMC and the press conference could generate some negative headlines that may directly affect the dollar

The general consensus is for a 25 basis point cut in September, according to the CME FedWatch tool.

Pound Falls on Bank of England Uncertainty

GBP/USD was down about 0.1% to 1.2826 ahead of the Bank of England’s meeting on Thursday, which is expected to either keep rates unchanged or cut them.

UBS believes the BoE will make a 25 basis point cut tomorrow, asserting that the main reason for the expected cut is the latest data.

Many analysts believe that June’s headline inflation of 2% was in line with the Bank’s May forecast, despite upside surprises in April and May. Additionally, the overshooting of services inflation, which registered 5.7% in June compared to the 5.1% estimated by the Bank, was largely due to various volatile and regulated components. These factors should not affect the inflation outlook in the medium term, an assessment shared by several members of the Monetary Policy Committee, according to the June minutes.

Third, the July labor market report indicated further signs of slowing wage growth, with private sector wages declining 0.3 percentage points to 5.6% year-over-year in May, in line with the Bank’s May forecast

The EUR/USD rose 0.1% to 1.0823 after the eurozone economy grew by about 0.3% in the second quarter, barely above estimates.

Likewise, eurozone consumer prices rose by 2.6% in July year-over-year, slightly above the 2.5% estimate. The underlying figure, which excludes volatile items such as energy and food, came in at 2.9% year-over-year.

Yen Soars on Bank of Japan Hike

In Asia, the USD/JPY lost about 1.4% to 150.66 as the yen soared after the Bank of Japan decided to raise its benchmark short-term interest rate by 15 basis points to 0.25%, the highest level in line with market expectations.

It also announced that it will halve the pace of Japanese government debt purchases from 6 trillion yen to 3 trillion yen ($19.5 billion) in the first quarter of 2026.

The yen posted strong gains during July, with USD/JPY down about 6.5%, as a combination of carry trades and suspicions of government intervention triggered buying in the currency.

USD/CNY retreated 0.4% to 7.2256 as strong purchasing managers’ index data and positive comments from the government raised expectations of more stimulus measures in the country.

AUD/USD fell 0.7% to 0.6492, touching three-month lows, driven primarily by weak June quarter CPI data.

Although headline CPI rose as expected in the quarter, the decline in core inflation fueled hopes that inflation will ease in the coming months, reducing the need for a rate hike by the Reserve Bank of Australia (RBA).

8

U.S. stock markets soar boosted by Federal Reserve decision; Microsoft fails to deliver

U.S. stocks rose Wednesday on optimism that the Federal Reserve will lead the way to a rate cut in September, overshadowing disappointing results from Microsoft. This and much more is happening today in the stock market.

Optimism about the Fed

All eyes are on the Federal Reserve on Wednesday, when the U.S. central bank wraps up its latest policy-setting meeting.

The Fed is expected to keep its benchmark overnight interest rate in the current range of 5.25% and 5.50%, as has been the case since last July, but investors expect policymakers to lay the groundwork for a rate cut in September.

Futures believe a quarter-point rate easing in September, with a remote possibility of a 50 basis point reduction, and 66 basis points of easing by Christmas.

Wall Street’s major indexes ended mixed on Tuesday, with both the S&P 500 and NASDAQ Composite on track to end the month lower, with the latter losing nearly 3%.

Meanwhile, the Dow Jones Industrials are on track to end the month up more than 4% as the market has moved away from large tech stocks in favor of smaller, more cyclical-oriented companies.

Microsoft’s earnings miss projections

Aside from the Fed, investors will likewise have to digest quarterly results from several market heavyweights.

Microsoft (MSFT) shares lost nearly 3% before the open of trading after its fourth-quarter cloud revenue growth missed market estimates.

While the company’s global profit barely beat estimates for the June quarter, revenue from Azure, Microsoft’s cloud business, rose 29%, below estimates of 30.2% and equally slowing compared to the previous quarter’s 31% increase. All this, despite investment in artificial intelligence increasing by $5 billion during the quarter.

On the flip side of the coin, shares of Advanced Micro Devices (AMD) rose 9% before the market opened, while rival NVIDIA (NVDA) added nearly 5% after AMD generated better-than-estimated earnings and forecast positive revenue for the current quarter, alluding to strong demand in artificial intelligence.

AMD’s earnings highlighted a potential divide in AI-supported profits, where vendors of AI-enabled equipment appear to be outperforming their customers.

Meta Paltforms, next

Meta Platforms (META) becomes the latest of the large-cap tech giants to release quarterly results this week after the close.

Meta, which owns and operates Facebook, Instagram, Threads and WhatsApp, among other products and services, is expected to have a 20% increase in quarterly revenue.

Other companies to release figures with Boeing (BA) before the bell, as well as Qualcomm (QCOM), eTSY (ETSY) and Carvana (CVNA), just after the session closes.

Crude oil prices soar on Middle East tensions

Crude oil prices soared on Wednesday as the assassination of Hamas leader Ismail Haniyeh in Iran heightened tensions in the Middle East, raising the possibility of a wider conflict impacting supply.

Multiple media outlets reported that Ismail Haniyeh was killed in an Israeli strike, which could mean an escalation of the war between Israel and Hamas, which extended into a ninth month in July.

It could also mean an escalation of tensions between Iran and Israel, following a series of missile strikes between the two earlier this year, and stoke fears of all-out war in the Middle East, especially after Israel carried out strikes on Tuesday against the Lebanon-based, Iranian-backed armed group Hezbollah.

The news has overshadowed data from the American Petroleum Institute, according to which U.S. inventories fell by nearly 4.5 million barrels the previous week.

The reading, if corroborated by official data to be released later in the session, would mark the fifth straight week of declining U.S. inventories, as demand for fuel remained supported by the travel-filled summer season.

9

Senator Lummis Introduces Bill to Establish a Bitcoin Reserve in the U.S.

The bill, abbreviated as the “BITCOIN Act of 2024,” calls for the U.S. Treasury to purchase bitcoins over a 5-year period until a pool of 1,000,000 BTC is achieved. The plan to incorporate Bitcoin (BTC) into the U.S. national reserves is beginning to take shape. U.S. Senator Cynthia Lummis has advanced the first draft of a bill that would enable the creation of a new “Bitcoin Strategic Reserve” and would set a path for the United States to have funds in that cryptocurrency. This was reported Wednesday by CoinDesk and The Block, which have had access to the document.

Dubbed the “Boosting Innovation, Technology, and Competitiveness through Nationally Optimized Investment Act of 2024,” or the “BITCOIN Act of 2024” for short, the bill proposes that purchases of the cryptocurrency would be funded in part by the appreciation of gold certificates held by the Federal Reserve System.

Lummis, a Wyoming Republican known for her pro-Bitcoin stance, announced her intention to propose the reserve on Saturday during the “Bitcoin 2024” conference in Nashville. She took the stage minutes after former President Donald Trump, a Republican candidate in this year’s presidential race, delivered a speech in favor of the cryptocurrency industry. Trump further proposed the formation of a “strategic national Bitcoin reserve” and made other related promises should he win the White House in November.

Bitcoin National Reserve: The Draft

According to reports, the draft states that the U.S. Treasury Secretary would set up a “Bitcoin Purchase Program” of up to 200,000 BTC per year for a period of five years, up to a total stash of 1 million bitcoins, currently valued at more than USD $1 billion. The bitcoins would be held for at least 20 years and would only be available to pay down the federal debt. Thereafter, no more than 10% of the assets could be sold within any two-year period.

The bill requires the Treasury Department to make public quarterly reports on Bitcoin holdings and post them on its website, the reports said. It also states that U.S. states will be able to voluntarily participate in holding Bitcoin as part of the reserve, provided they meet certain requirements, including security protocols. “Establishing a strategic Bitcoin reserve to bolster the U.S. dollar with a hard digital asset will secure our nation’s position as a global financial leader for decades to come,” Lummis said in a statement.

Federal Reserve Gold Revaluation

The bill also includes a section on adjustments to gold certificates, calling on the Federal Reserve Banks to revalue gold certificates and capture their fair market price. Under the plan, within six months of the law’s enactment, Federal Reserve Banks will be required to surrender all of their gold certificates to the Secretary of the Treasury, CoinDesk has reported. “Within 90 days of the surrender of the last such certificate, the Secretary shall issue new gold certificates to the Federal Reserve Banks reflecting the fair market price of gold held by the Treasury against such certificates on the date specified by the Secretary in each certificate,” the draft reads, as quoted by The Block.

Thereafter, the Federal Reserve Banks would “remit the difference in cash value between the old and new certificates” to the Secretary of the Treasury. On July 24, the Federal Reserve Banks held gold reserves valued at $11 billion, according to the central bank’s balance sheet. Along with gold, the United States also holds oil reserves.

For After November

Lummis previously told The Block that the bill will not pass this year but could be considered after the November presidential election. Cryptocurrencies have become a central issue amid the presidential campaign in the U.S. Trump, who began accepting Bitcoin donations in May, has stated his intention to protect the industry and end the “crackdown” that has been pushed by Joe Biden’s administration against the digital asset sector.

Meanwhile, Vice President Kamala Harris’s presidential campaign team has reportedly begun reaching out to ask questions about the cryptocurrency industry. At the time of writing, BTC is trading around $66,100.

10

U.S. stock markets plunge on economic worries and tech slump

U.S. stock indexes fell sharply on Monday during the European session amid growing concerns about an economic slowdown, with technology stocks mainly being hit.

Fear of economic slowdown hits Wall Street

The sharp losses in Wall Street futures came after U.S. stock markets in the U.S. had been rattled the previous week on fears of a possible economic slowdown.

A series of poor readings increased concerns that the Federal Reserve had kept interest rates at high levels for quite some time, and that the odds of a soft landing for the economy were slipping.

It seems that this notion came to a head on Friday after July’s nonfarm payrolls data missed estimates by a wide margin, signaling a sizable cooling in the labor market.

Although the data raised hopes of further interest rate cuts by the Federal Reserve, it did dampen appetite for risk-linked assets.

Technology stocks, which benefited greatly from the positive tone at the beginning of the year, have been significantly affected, and the NASDAQ Composite, with a strong technology component, has lost close to 10% from its all-time high at the beginning of the year, entering correction territory.

More economic data

More economic data will be released on Monday, including the ISM services PMI for July, and San Francisco Fed President Mary Daly will speak at a conference after the close of business on Monday.

Investors will be looking for more signals regarding the strength of the world’s largest economy, after Friday’s jobs report made the sentiments n of fears of a recession.

The volatility index for U.S. stocks, the VIX index, surpassed the 40 level early Monday, reaching its highest level since October 2020, Bloomberg reports.

The index has surged to nearly 79%, the biggest rise on record since February 20018, and has reached its highest intraday level in four years.

Right now, markets are forecasting a near 78% chance that the Fed will not only cut rates by September, but by nearly 50 basis points.

High-profile earnings follow

Most of the major companies have already reported their results, although some high-profile results are expected in the coming days.

Caterpillar (CAT), the industrial leader, and Uber Technologies (UBER), the ride-sharing company, will release their results on Tuesday.

Super Micro Computer (SMCI), which saw a considerable valuation spike on the back of artificial intelligence hype, will also release its results on Tuesday, while media giants Walt Disney (DIS) and Warner Bros.

Crude oil falls as a result of growth concerns

Crude oil prices fell on Monday, trading near eight-month lows, due to growing concerns about the economic slowdown in the United States, the world’s largest crude oil consumer.

Weak U.S. economic data in the previous week has hit sentiment in crude oil markets, as estimates of a recession in the world’s largest economy are a bad sentiment for future demand, even as recent inventory data indicated that increased travel demand during the early summer had kept gasoline consumption high.

This comes on top of disappointing growth figures from China, the world’s largest oil importer, and surveys indicating weaker manufacturing activity in Asia and Europe, adding to concerns about oil consumption.

11

Trump plans to use cryptocurrencies to pay off U.S. debt and be a leader in the sector

Former President Donald Trump recently hinted at the potential usefulness of cryptocurrencies to pay down the $35 trillion U.S. national debt. In an interview on Fox Business and while participating in the Bitcoin2024 Conference, Trump argued that the cryptocurrency sector could play a role in the national financial strategy, although he did not provide specifics on how this proposal would be carried out.

Trump’s changing perspective on cryptocurrencies

Trump, a Republican candidate for president, stated that the U.S. should take the lead in the cryptocurrency sector, which he called having a “very high intellectual level.” This change represents a marked difference from his previous comments, as he has in the past branded digital assets as “a disaster waiting to happen” and, in May 2018, during his presidency, went so far as to order then-Treasury Secretary Steven Mnuchin to take action against Bitcoin for alleged fraud. At the Bitcoin2024 Conference, Trump made the case that, if re-elected, he would prevent the government from selling seized Bitcoin on the open market. Instead, he would hold the asset strategically as an investment, indicating a more positive view regarding the potential of cryptocurrencies.

Campaign strategy and cryptocurrencies

Trump’s latest comments also correspond with his efforts to raise funds for his election campaign by positioning himself as a supportive candidate for cryptocurrencies, unlike President Joe Biden. This approach indicates Trump’s recognition of the increasing importance of cryptocurrency in U.S. economic and political debates. Ultimately, Trump’s statements show a nuanced shift in his attitude toward cryptocurrencies, viewing them as a tool for managing the national debt and strengthening his campaign by appealing to cryptocurrency advocates.

Senator Cynthia Lummis has recently proposed a bill to constitute a strategic Bitcoin reserve in the United States to combat the harmful effects of rampant monetary printing and preserve U.S. financial supremacy in global markets and trade.

The Wyoming senator has set a goal of having the U.S. Treasury purchase 5% of the total Bitcoin supply, preserving the scarce decentralized asset for at least 20 years as a bulwark against central bank monetary devaluation and poor fiscal policy.

12

Market Highlights for the week: Economy, market, oil

Concerns about the economy continue, especially over fears that the Federal Reserve has kept interest rates high for too long, hurting growth. More high-profile earnings reports are expected and oil prices look set to remain volatile due to a combination of recession fears and geopolitical risks. Here’s a look at what will happen in the markets this week.

U.S. data and Fed speeches.

After Friday’s weak July jobs report, which fueled fears about the eventuality of a recession, the economic calendar for next this week is notably lighter. On Monday, the Institute for Supply Management will release its service sector index, which is expected to indicate moderate growth. On Thursday, investors will hear about the state of the labor market with the weekly release of initial jobless claims, which are expected to pull back slightly from their highest level in nearly a year. Investors will also hear from San Francisco Fed President Mary Daly and Richmond Fed President Thomas Barkin, who kept rates unchanged last week but left the possibility of a rate cut in September.

More earnings reports

While most large-cap companies have already released their results, a few high-profile ones are expected in the coming days. Results from Caterpillar (CAT) and Walt Disney (DIS) will provide more information on manufacturing and consumer health. In addition, reports are expected from healthcare heavyweights such as Eli Lilly (LLY) and Super Micro Computer (SMCI), at the center of the market’s enthusiasm for artificial intelligence. U.S. stock markets fell for a second straight day on Friday, pushing the Nasdaq Composite into correction territory, as hints of an economic slowdown fueled fears that the Federal Reserve has delayed a rate cut too long. Adding to the downward pressure were declines in Amazon (AMZN) and Intel (INTC) following disappointing quarterly results and outlook.

China outlook

This week, investors will be treated to information on how China’s economic recovery will evolve in the second half of the year through a series of economic data. The week begins with a private sector survey on services activity, to be followed by trade data on Wednesday and a consumer price reading at the end of the week. Recent data point to a gloomy outlook for the world’s second largest economy, and recent rate cuts have highlighted the urgency of Beijing’s efforts to shore up growth. Policymakers will be closely watching Friday’s inflation figures for clues on how much more needs to be done to boost weak domestic demand.

Reserve Bank of Australia decision

The Reserve Bank of Australia is expected to leave interest rates unchanged at its next policy meeting on Tuesday after data last month indicated that core inflation unexpectedly slowed to a two-year low in the second quarter and that economic growth moderated in the first quarter.

Market participants will be looking to future central bank guidance, with a 70% chance of a rate cut later in the year if inflation continues to slow.

Oil prices

Oil prices declined on Friday, settling at their lowest level since January, as economic data from the US and China, the largest oil importer, heightened concerns about demand expectations.

The weak U.S. jobs report, coupled with slowing manufacturing activity in China, pressured prices lower on the risk that the sluggish global economic recovery will impact oil consumption. Oil investors are also keeping an eye on the Middle East, where the Iranian-backed Lebanese group Hezbollah said its conflict with Israel had entered a new phase. Meanwhile, last Thursday’s OPEC+ meeting did not change the group’s production policy, which plans to start withdrawing production cuts from October.

13

Dollar Falls on Recession Fears; Yen and Swiss Franc Gain

The U.S. dollar fell sharply on concerns about U.S. economic growth, while the Swiss franc and Japanese yen saw strong safe-haven demand.

Dollar Loses Ground on Recession Fears

The dollar’s sell-off came after data released on Friday showed a significant cooling in U.S. job creation in July, and U.S. Treasury yields fell as traders began to consider the likelihood of a hard landing for the U.S. economy due to the prolonged period of high interest rates.

Traders now expect the Federal Reserve to cut interest rates in September, and anticipate larger cuts than the previously expected 50 basis points at the September and November Federal Open Market Committee meetings.

Wells Fargo now estimates two 50 basis point rate cuts at the Federal Open Market Committee meetings in September and November.

This forecast marks a considerable change from past predictions due to emerging economic indicators, with recent data raising concerns about the economy.

Swiss Franc in Demand as Carry Trades Unwind

In Europe, the Swiss franc soared as traders sought safety in this turbulent environment.

The Swiss franc hit a seven-month high against the dollar, with USD/CHF losing nearly 1.4% to 0.8458.

The Swiss currency also benefited from the unwinding of carry trades, in which investors borrow money from low-interest-rate economies such as Japan or Switzerland to finance investments in higher-yielding assets elsewhere, a strategy that has gained popularity recently.

The EUR/USD rose nearly 0.6% to 1.0974 due to the dollar’s general weakness.

Expectations of further cuts by the European Central Bank have also increased, although very few traders have been long on the euro since the start of the political turmoil in France at the end of June.

Weaker global growth is not good for the pro-cyclical euro, although the fact that the narrative of U.S. exceptionalism could come back to earth with a bump should support EUR/USD, given that the Fed is poised to cut rates sharply.

GBP/USD lost 0.4% to 1.2752 on fears that the Bank of England will also delay, as the UK central bank did not cut interest rates until the previous week.

Moreover, the decision to cut rates by a quarter point to 5% was split among policymakers (5-4), indicating that the central bank may remain cautious going forward.

Yen Hits Seven-Month High

USD/JPY sank 3.2% in Asia to 141.86, and the yen hit a seven-month high against the dollar as traders unwound their carry trades in anticipation of major rate cuts by the Federal Reserve.

The rise in the yen, which hit a 38-year low against the dollar in July, was also helped by the Bank of Japan’s 15 basis point rate hike last week.

The USD/CNY was down 0.6% to 7.1167, and the yuan rallied due to a weaker dollar, despite uncertainty about the economic slowdown in China.

14

Dollar Rebounds After Sharp Losses, Euro and Pound Lose Ground

The U.S. dollar gained ground on Tuesday, reversing some of its recent losses as some calm returned to currency markets.

Dollar Recovers After Heavy Losses

In recent weeks, the dollar has been significantly affected by fears of a possible U.S. recession after a series of weak labor market data, which has triggered bets that the Federal Reserve will cut rates more than initially expected.

Right now, traders are estimating 110 basis points of easing in 2024 by the Fed, with about an 80% chance of a 50 basis point cut in September, after fully discounting a 50 basis point cut on Monday.

Fed policymakers on Monday pushed back against the notion that the weaker-than-expected July jobs data means the economy is in a recessionary free fall, but also noted that the Fed will have to cut rates if it wants to avoid such an outcome.

Austan Goolsbee, president of the Chicago Fed, said, “The employment numbers are weaker than expected, but they still don’t look like a recession. I think in making decisions you have to take into account where the economy is headed.”

Both the Euro and the Pound Lose Ground

Turning to Europe, the dollar gained ground against the euro and sterling as the European Central Bank and the Bank of England have begun interest rate cuts aimed at stimulating their respective economies.

The EUR/USD lost about 0.4% to 1.0911, after touching a seven-month high of 1.100 on Monday, following news that retail sales fell by 0.3% in June in the eurozone, indicating that consumers are likely to remain cautious.

On the other hand, German industrial orders rose more than forecast in June, by 3.0% compared to the previous month, indicating a glimmer of hope for the European continent’s largest economy.

The GBP/USD lost about 0.5% to 1.2706, giving back some of its recent gains in the wake of the dollar’s strengthening.

The Bank of England cut interest rates last week, reducing the benchmark rate by a quarter point to 5%.

Yen Falls for First Time in August

USD/JPY rose about 0.2% to 144.47, and the yen weakened for the first time in August, consolidating after volatile moves in recent days.

The yen had benefited from increased safe-haven demand in the face of the broader financial market slump. Bullish signals from the Bank of Japan, which raised interest rates and hinted at further hikes, also boosted the currency, as did the unwinding of carry trades.

USD/CNY rose 0.3% to 7.1504, with the yuan losing strength in anticipation of this week’s trade and inflation data.

AUD/USD was down 0.2% to 0.6480, with the Australian dollar retreating following comments from Reserve Bank of Australia Governor Michele Bullock that rate cuts are further away.

The Australian central bank left interest rates unchanged on Tuesday, as expected, while reiterating that it was not ruling out any measures to control inflation.

15

U.S. Stock Markets Rise, with Strong Earnings Supporting Sentiment Shift

U.S. stock markets rose on Tuesday, showing signs of recovery from Monday’s decline, despite continuing concerns about an economic slowdown.

Recession Fears Lead to Heavy Losses

Concerns about a significant slowdown in economic growth, following a string of poor data related to the purchasing managers’ index and the labor market, caused the DJIA, S&P 500, and Nasdaq to lose nearly 5%, 6%, and 8% respectively in three days, marking their worst three-day performance in more than two years.

Weak economic data fueled fears that the Fed would keep interest rates higher for longer and that any cut by the central bank right now would not be enough for the economy to achieve a soft landing.

That said, markets increased their estimates for a 50 basis point cut in September and were looking at at least 100 basis points in rate cuts this year, according to CME FedWatch.

2Q Earnings Follow

Caterpillar (CAT) stocks rose 1% after the industry giant unveiled a slight quarterly profit increase, supported by resilient demand for its larger excavators and other construction equipment amid rising U.S. infrastructure spending.

Shares of Uber Technologies (UBER) rose more than 5% as the ride-hailing company beat estimates for both second-quarter revenue and core earnings on continued demand for its ride-sharing and food delivery services.

Super Micro Computer (SMCI) will also release its results after the bell, and is set to provide more clues about demand from the artificial intelligence industry.

Additionally, Palantir Technologies (PLTR) rose nearly 11% after the software services provider raised its annual revenue and profit forecast for the second time in 2024, while Lucid Group (LCID) rebounded more than 9% due to better-than-estimated second-quarter revenue and after the electric vehicle maker unveiled that its largest shareholder, Saudi Arabia’s Public Investment Fund (PIF), will invest about $1.5 billion in cash.

Media giants such as Walt Disney (DIS) and Warner Bros. Discovery (WBD) will release their results on Wednesday.

Oil Prices Continue to Fall

Crude oil prices declined on Tuesday, continuing to fall in a volatile market after hitting eight-month lows on concerns about global demand.

Concerns about a possible escalation of the war between Israel and Hamas, especially after Iran vowed to retaliate for the assassination of a Hamas leader in Tehran, have supported oil markets.

However, confidence remains fragile due to fears that slowing economic growth will dampen demand, especially after disappointing U.S. labor market data raised concerns about a potential U.S. recession.

16

Dollar rises, yen falls after Bank of Japan rules out another rate hike

The U.S. dollar rose on Wednesday, while Japan’s yen sank after the Bank of Japan tried to calm the turbulent waters by signaling that it will not raise rates further if markets remain highly volatile.

Dollar recovers ground after sharp losses

The dollar gained some ground on Wednesday, helped in part by the yen’s weakness and amid bets that U.S. economic growth will not deteriorate as sharply as markets expect.

The dollar was hit hard by fears of a U.S. economic recession after a series of weak labor market data, which increased bets that the Fed will have to cut rates more than initially expected.

However, market traders have also adjusted their estimates of Fed cuts as the week has moved on, with markets now estimating a 70% chance that the Fed will cut rates by 50 basis points by September, according to CME’s FedWatch tool, compared to 85% the day before.

Similarly, there are analysts who point out that the market trend is considerably higher than it was a week ago, but they suggest that no serious market disruptions have been generated so far that would lead policymakers to intervene.

Euro and sterling in tight spaces.

EUR/USD lost 0.1% to 1.0918, retreating further from Monday’s seven-month high of 1.1009 on the back of the rising dollar

Meanwhile, GBP/USD rose 0.2% to 1.2708, not far from the five-week low it hit last session.

Data released on Wednesday indicated that the U.K. economy grew more than expected in 2022.

The Office for National Statistics said Wednesday that it now believes the U.K. economy grew by 4.8% in 2022, up from an earlier estimate of 4.3%.

Yen plunges sharply after rate hike option is downplayed

In Asia, USD/JPY rose 2.2% to 147.47, with the yen sinking sharply after Bank of Japan officials downplayed the importance of rate hike estimates.

BOJ Deputy Governor Shinichi Uchida noted that the bank will not raise interest rates when markets behave unsteadily, comments generated by volatile movements in Japan’s currency.

All in all, the yen remained well above the 38-year low reached this 2024, and is likely to receive further support as Japan’s economy improves helped by wage growth.

USD/CNY rose 0.4% to 7.1862, and the yuan barely flattened its losses after mixed trade data.

China’s trade balance contracted more than previously thought in July, weighed down by poor exports after the European Unipon imposed heavy tariffs on imports of Chinese-made electric vehicles in early July.

Although Chinese imports beat estimates, fueling some bets on a recovery in local demand.

The focus right now will be on inflation data due out this week.

17

U.S. stock markets grow; Super Micro Computer falls

U.S. stock indexes rose on Wednesday, following Wall Street’s recent rally, although sentiment remains fragile.

Wall Street indexes rose on Tuesday, showing signs of improvement and recovering some of the heavy losses registered the previous week amid concerns about a possible U.S. recession and a slowdown in technology.

The S&P 500 along with the NASDAQ Composite rose 1%, rebounding from three-month lows, while the Dow Jones Industrial Average was up about 0.8%.

These futures were boosted by comments from a senior Bank of Japan official who downplayed the bank’s plans to raise interest rates, in an environment where markets remain volatile.

Highly stressed market environment

That said, confidence in risk assets remains fragile amid persistent concerns about slowing growth and lackluster earnings.

For its part, Goldman Sachs indicated that its Financial Stress Index (FSI) has tightened considerably in recent days, although it remains within normal historical levels.

According to a note written by Goldman economists, most of the tightening is due to increased volatility in equity and fixed income markets, while short-term financial market conditions appear to be generally stable.

The economists also added that clearly market tightness is more noticeable today than a week ago, but for now, according to their ISF, there is no need for policymaker intervention.

Walt Disney Results

There are more earnings to digest Wednesday, including entertainment giant Walt Disney (DIS), CVS Health (CVS) and Shipify (SHOP).

Super Micro Computer (SMCI) likewise will be in the spotlight, due. as shares of the data center operator plunged in pre-market trading in the wake of its June earnings missing estimates, raising concerns about how much demand the artificial intelligence industry was producing.

Airbnb (ABNB) also fell sharply after the home-rental company estimated third-quarter revenue relative to estimates and signaled of shorter booking sales, indicating that travelers were waiting until the last minute to book in the wake of economic uncertainty.

The resilience of S&P 500 earnings remains unchanged despite growing recession fears and recent negative price action, Cati strategists said in a note Wednesday.

The bank’s Citi Economic Data CHnage index, which summarizes U.S. macroeconomic data holdings, points to further deterioration in the U.S. economy.

Interestingly, though, despite economic data showing weakness in 2022, S&P 500 earnings growth was unchanged rather than significantly negative, as moving earnings recessions mitigated the impact at the overall index level.

On an overall outlook, strategists remain confident in their forecast of $250 per EPS for the S&P 500 this year, which is slightly higher than the current bottom-up consensus of about $243.

18

Nasdaq Applies to the SEC for Permission to Trade Options Linked to Ethereum ETFs

Nasdaq, the exchange for trading financial assets and stocks, made a request to U.S. regulators to allow it to trade options linked to the spot Ethereum ETFs that recently entered the market.

Ethereum ETF options trading

The request came in a form filed on [specific date] with the Securities and Exchange Commission (SEC), in which Nasdaq proposed to the agency to allow trading of derivatives of the iShares Ethereum Trust, a spot Ethereum ETF managed by BlackRock and better known as ETHA, whose shares are traded on the Nasdaq platform. It should be noted that Nasdaq also made a similar request some time ago regarding spot Bitcoin ETFs.

However, the SEC informed the platform and other interested parties that these products were not authorized for the time being because more time was needed to properly study the case. Options trading would become a natural step in the stock market, as they allow for new products and modalities related to the asset they are associated with.

According to Cointelegraph, hedge funds and financial advisors can turn to these alternatives to protect themselves from abrupt market movements, such as the widespread drop that affected Bitcoin, Ethereum, and other cryptocurrencies since August 4. According to analysts consulted by Cointelegraph, allowing the trading of options associated with Ethereum ETFs would open up a much larger market to these products, attracting larger amounts of capital and helping to popularize them among interested investors.

Ethereum ETFs and their market debut

After months of uncertainty and waiting, Ethereum ETFs finally officially hit the market on July 23. Although they have seen more outflows than inflows in the 11 days of trading on the U.S. exchange, the large capital flows highlight investor interest in the new product.

According to data published by Farside Investors, to date, Ethereum ETFs have posted a balance of $473.9 million in outflows, a figure driven primarily by sales by Grayscale’s ETHE, which alone racked up more than $2.203 billion in sales. However, in contrast to the negative results of one of Grayscale’s funds, we find the performance of products from BlackRock, Fidelity, Bitwise, and Grayscale’s other fund, which accumulated positive balances of $759.9 million, $335.8 million, $295.1 million, and $213.1 million, respectively.

Finally, as for Ethereum, the digital currency is trading at the time of writing at around $2,500 per unit, a value that represents an increase of 2.5% in the last 24 hours.

19

Dollar Rises Ahead of CPI

The U.S. dollar rose on Monday during a light trading day as traders awaited the release of key inflation data later in the week, seeking clues about the Federal Reserve’s upcoming policy decisions.

Dollar gains on CPI expectations

The dollar received support at the end of the previous week after better-than-expected U.S. jobs data led traders to trim their bets on interest rate cuts by the Federal Reserve in 2024.

Earlier in the week, the U.S. currency was reported to have weakened due to concerns about the U.S. economy, coupled with the Bank of Japan’s hawkish stance.

Fed funds futures imply a 49% chance of a half-point rate cut in September, down from 100% the previous week.

This backdrop of uncertainty makes markets highly vulnerable to data and events, most notably the U.S. consumer price index on Wednesday.

July CPI data is expected to show that inflation continues to approach the Fed’s 2% annual target, with forecasts indicating that annual core inflation will dip to 3.2%, the lowest level since April 2021.

Sterling Awaits Inflation Data

EUR/USD rose to 1.0920, close to the high of 1.1009 reached last week, marking the pair’s highest level since January 2 of this year.

In Europe, the pair is showing signs of a quiet start to the week, with a sparse European economic data calendar and few European Central Bank speeches on the agenda.

This has led the market to focus on the first revision of the Eurozone’s GDP data for the second quarter.

The European Central Bank began cutting interest rates in June, and many expect policymakers to agree on another rate cut scheduled for September.

GBP/USD traded flat at 1.2759 at the start of a week full of U.K. economic data, as investors look for signs that the Bank of England will continue its rate-cutting cycle next month.

The BoE cut rates for the first time since 2020 earlier this month, and markets are currently pricing in a 33% chance of another quarter-point cut at its September meeting.

Data on wage growth will be released on Tuesday, followed a day later by inflation figures, which will be closely scrutinized for signs of ongoing price pressures.

Yen plunges

In Asia, USD/JPY rose nearly 0.4% to 147.25, retreating further after a large-scale rally in the previous month.

Economic data and central bank meetings in Asia kept investors on edge, while a public holiday in Japan limited volumes.

USD/CNY rose 0.2% to 7.1811, while the yuan retreated sluggishly.

Although large losses have been stemmed by continued support from the People’s Bank, skepticism about the Asian giant’s economy has kept traders mostly short on the currency.

This week, the focus is on China’s industrial production and retail sales data to gain more insight into the country’s primary economic drivers.

20

U.S. Stocks Rise, Inflation Data Trends Upward

U.S. stock indexes traded quietly on Monday, appearing stable after the wild swings of the previous week, with attention focused on key inflation data due later this week.

More CPI data to come

This week, attention will focus on the consumer price index inflation data, due on Wednesday, for more signals regarding the economy and inflation cooling.

The reading is expected to have cooled slightly in July compared to last month, a trend likely to increase optimism about lower interest rates.

According to CME FedWatch, investors are torn between a 25 or 50 basis point cut by September. The Fed is widely expected to begin cutting rates then, amid growing signs of a cooling U.S. economy.

The Fed recently indicated that any further encouraging economic data will set the stage for a rate cut in September and that it would not need to see inflation reach its 2% annual target to begin cutting rates.

Wall Street shows signs of recovering from the previous week’s losses

Wall Street indexes closed Friday with slight gains, ending the week flat.

The decline in technology stocks, coupled with fears of an economic recession in the United States, caused stock market indexes to start the previous week with considerable losses, with the Nasdaq entering correction territory from its recent highs.

However, bargain-buying in technology stocks, coupled with the belief that U.S. economic recession fears may be exaggerated, helped Wall Street recover most of its losses.

In addition to Wednesday’s inflation data, there will also be some earnings releases this week, even though the earnings season is mostly over.

Home Depot (HD) and Cisco Systems (CSCO) will release their results later in the week.

Crude oil rises again

Crude oil prices rose for a fifth consecutive session on Monday as concerns about the U.S. economy eased, while geopolitical tensions in the Middle East remained elevated.

Iran and Hezbollah have vowed to respond to the assassinations of Hamas leader Ismail Haniyeh and Hezbollah military commander Fuad Shukr.

Axios reported on Sunday that Israeli intelligence believes Iran will attack Israel directly within days.