Stock market today: Dow, S&P 500, Nasdaq futures slip after record-setting surge with Nvidia earnings in focus

🏦 Major brokerages pivot to September Fed rate cut on Powell's labor warning:

Major brokerages, including Barclays, BNP Paribas and Deutsche Bank, now expect a 25-basis-point U.S. Federal Reserve rate cut in September following Chair Jerome Powell's shift in tone at Jackson Hole toward rising risks in the labor market.

Powell's remarks at the Jackson Hole symposium emphasized a change in the Fed's reaction function, with greater weight now placed on labor market risks.

"This unusual situation suggests that downside risks to employment are rising," Powell said, warning that such risks could materialize quickly in the form of layoffs and a spike in unemployment.

In notes released on Friday after Powell's speech, Barclays pulled forward its previously expected September 2026 cut to September 2025, saying his speech introduced "an easing bias" and raised the bar for not cutting. Reuters reports.


📊 US stock futures dip after Powell-led rally on September cut expectations:

U.S. stock index futures slipped on Monday, pausing after strong gains in the previous session, when Federal Reserve Chair Jerome Powell hinted that an interest-rate cut could be on the table at the central bank's meeting next month.

Recent data suggests heightened risks to labor market health and a majority of Fed officials have said U.S. tariffs were likely to add to inflationary pressures in the coming months.

The Personal Consumption Expenditures Price index - the U.S. Federal Reserve's preferred inflation gauge - is due to be released on Friday, while official nonfarm payrolls data is expected next week. The reports will be key, especially after Powell warned that a dovish verdict was not a certainty. Yahoo Finance reports.


💵 Stablecoins are set to reshape the multitrillion-dollar US Treasury market:

With US debt above $37 trillion and climbing, the US Treasury market is eyeing stablecoin issuers like Tether and Circle (CRCL) as key buyers.

Wall Street's explosive adoption of digital tokens pegged to the US dollar has been fueled by the recently signed GENIUS Act, which established guidelines and a landmark framework for the industry.

“In terms of US President Trump’s aim to make the US the crypto capital of the planet, a well-regulated stablecoin market could cement the US dollar dominance in the world of digital finance," said HSBC analysts earlier this week.

Under the new law, stablecoin issuers have to back tokens with dollars or other high-quality liquid assets, effectively positioning short-term T-bills as the collateral of choice. Yahoo Finance reports.


📈 Jefferies raises S&P 500 annual target to 6,600 on resilient earnings:

Jefferies lifted its year-end target for the S&P 500 index to 6,600, citing robust corporate earnings, easing concerns about the health of the U.S. economy.

Previously, the brokerage had set its year-end target at 5,600, making it the sole firm projecting the benchmark index below the 6,000 mark. UBS, Citigroup, and HSBC were among the leading brokerages that boosted their index targets earlier this month amid improving market sentiment.

Artificial intelligence-driven names and the "Magnificent Seven" led the market gains, while notable strength in financials suggests a resilient macroeconomic backdrop, Jefferies analyst Desh Peramunetilleke said in a note on Sunday. MarketScreener reports.


🌍 Fed pivot bolsters world stocks, China shares at highest since 2022:

Expectations of a resumption soon in U.S. interest rate cuts bolstered world stocks on Monday, with shares in Asia rising to multi-year highs.

However, European shares retreated as some of the enthusiasm following U.S. Federal Reserve chief Jerome Powell's Jackson Hole speech faded and investors refocused on the broader economic picture. London markets were closed for a holiday, thinning overall trading volumes in Europe.

Powell's dovish change of course has prompted futures to price in an 84% chance of a quarter-point rate cut in September, and at least 100 basis points of easing to 3.25-3.5% by the middle of next year. Reuters reports.


🌪️ World's central bankers fear being caught in Fed's storm:

Global central bankers gathered at a U.S. mountain resort over the weekend are starting to fear that the political storm surrounding the Federal Reserve may engulf them too.

U.S. President Donald Trump's efforts to reshape the Fed to his liking and pressure it into interest rate cuts have raised questions about whether the U.S. central bank can preserve its independence and inflation-fighting credentials.

Trump, frustrated by the legal protections given to the Fed's leadership and the long terms for Board of Governors members meant to outlast any given president, has put intense pressure on Chair Jerome Powell to resign and is pushing to oust another board member, Governor Lisa Cook.

If the world's most powerful central bank were to yield to that pressure, or Trump finds a playbook for removing its members, a dangerous precedent would be set from Europe to Japan, where established norms for the independence of monetary policy may then come under new attack from local politicians. Reuters reports.


💻 Software shares are in the doldrums. Blame AI:

Tech companies are giving the world artificial intelligence — but ironically, the tech sector itself is among those now feeling the most pain from AI. The rise of AI tools that can write and develop code is clouding the outlook for the software industry, investors say, sending shares in those companies into a slump.

Software as a service, or “SaaS,” is a bread-and-butter business model that is now at risk of disruption because of AI, investors say, a microcosm of how AI could upend the way many businesses operate.

Shares in software giant Salesforce (CRM) are down 26% this year, making it the second-worst performing stock in the Dow. CNN reports.

“Markets are constantly in a state of uncertainty and flux and money is made by discounting the obvious and betting on the unexpected.”

- George Soros

Sourced in: 17 of the Best Trading Quotes of All-Time by Trading Heroes.

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