Wall Street's Surging Hope: Interest Rate Cuts on the Horizon?
Stock Market Persists in Ascending Trajectory
The rumblings of an interest rate cut in July are echoing through Wall Street, as investors remain steadfast, pushing aside their concerns about geopolitical tensions, and focusing on the potential shift in monetary policy.
Stock markets showed a positive trajectory on Thursday. After a tentative start, buying momentum took the lead during trading hours, leading to an upward trend on three of the past four trading days. The Dow Jones Index climbed by 0.9 percent to 43,387 points, while the S&P-500 and Nasdaq indices saw improvements of up to 1.0 percent. Despite the Nasdaq Composite and the S&P-500 Index remaining just below their record highs, the Nasdaq-100 Index has already scaled new heights. According to early counts, there were 2,203 (854) gainers and 568 (1,910) losers on the NYSE. 53 (52) stocks remained unchanged.
While the Middle East situation receded into the background, market participants immersed themselves in discussions about interest rates and monetary policies. Recent buzz suggests that interest rates could potentially be trimmed as early as the next monetary policy meeting in July. The Futures Market implied probability stood at just over 20 percent, up from approximately 13 percent a week ago.
As US President Donald Trump continues to push for lower interest rates, central bankers under chair Jerome Powell strive to maintain their patient and cautious approach. However, the uncertainty around the impact of trade policy on inflation remains paramount.
Wall Street remains flush with intrigue. Economy indicators have shown unexpected strength, with orders for durable goods in the US surging in May and weekly initial jobless claims dropping more than expected. Yet, the GDP in the first quarter was revised up to 0.5 from 0.2 percent in the third estimate.
The dollar remains under pressure, weakened by ongoing interest rate cut speculation and concerns about the independence of the US central bank. The euro broke through the 1.17 mark, trading at 1.1701 dollars. The Dollar Index dipped by 0.4 percent, while US Treasury yields fell, with the ten-year yield decreasing 3 basis points to 4.26 percent.
Meanwhile, oil prices received a boost from significantly lower weekly US oil inventories reported the day before. Gold showed little fluctuation.
High-Performers and Underdogs
Micron Technology produced stunning third-quarter results and outlook for the current quarter, but still fell by 1.0 percent. Its incredible 50 percent surge since the beginning of the year may have contributed to the stock's slightly subdued response.
Nvidia continued to soar, rising by 0.5 percent, outpacing Microsoft as the most valuable company. Apple dropped by 0.3 percent following a lowered price target by JP Morgan, albeit remaining well above its current level. Meta Platforms, with its focus on AI advancements, saw a 2.5 percent surge, benefiting from its CEO Zuckerberg's poaching of three top experts from OpenAI.
Tesla shares slid by 0.6 percent following news of the departure of key executive Omead Afshar, responsible for sales and production in North America and Europe.
H.B. Fuller skyrocketed by 10.8 percent after raising its full-year outlook following strong quarterly results. However, Kratos Defense & Security Solutions suffered due to plans for a capital increase, with its stock dropping by 2.4 percent. Worthington Steel defied expectations, reporting increased profits despite declining revenues, sending its stock up by over 20 percent. Conversely, Jefferies reported lower quarterly revenues and profits, but still managed to rise by 0.3 percent. Walgreens Boots Alliance gained 0.6 percent after reporting increased sales in the reporting quarter.
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Keywords:- Wall Street- Fed- Jerome Powell- Monetary Policy- Interest Rates
Enrichment Data- The next expected monetary policy meeting for the Federal Reserve's Federal Open Market Committee (FOMC) is scheduled for July 29–30, 2025[5].- The latest official FOMC meeting was held on June 17–18, 2025, where no immediate rate cuts were announced, and the Fed reiterated its commitment to achieving maximum employment and 2 percent inflation over the longer run[1][4].- Implied probabilities of rate changes at upcoming meetings are typically derived from futures markets and financial analysts’ forecasts rather than directly from Fed communications. The precise current implied probability of an interest rate cut for the July 29–30 meeting is not available at the time of writing.- If you need the latest implied probabilities, checking market-based sources such as CME FedWatch Tool or financial news updates near the meeting date would be advisable.
The potential interest rate cut in July is of significant interest to Wall Street, especially during discussions about monetary policies. This cut, if implemented, could potentially be a result of the Federal Reserve's upcoming monetary policy meeting in July.
Investors are focusing on the impact of interest rate cuts on employment policies, community policy, finance, and businesses, including stocks in the stock-market. The futures market suggests a possibility of an interest rate cut, with the implied probability standing at over 20 percent, up from approximately 13 percent a week ago.
