Stocks pricing in Fed rate cut, gold and oil: Market Takeaways

The S&P 500 (GSPC) and Nasdaq (^IXIC) have jumped for four consecutive days, led by tech stocks. August's Producer Price Index came in line with expectations as inflation continues to cool ahead of the Federal Reserve's first interest rate cut. Meanwhile, gold (GC=F) prices hit another record high and crude oil (CL=F, BZ=F) moves 3% higher.

Yahoo Finance Senior Reporter Alexandra Canal breaks down the biggest takeaways from Thursday's trading session.

For more expert insight and the latest market action, click here to watch this full episode of Asking for a Trend.

This post was written by Melanie Riehl

Video Transcript

Sp 500 NASA jumped for four straight days.

Tech lean stocks higher for more on the train day.

Take aways.

Let's get to Yahoo finds his very own Alexander Canal.

A hey, Josh, you set and p higher NASDAQ higher all coming on the heels of softer inflation, more moderating inflation numbers we saw earlier today, the producer price index coming in in line on an annualized basis 1.7 percent for the month of August.

And then we saw that July number revised down.

This comes one day after we saw consumer prices on a headline annual basis, hit 2.5%.

That is the lowest that we've seen this number since early 2021.

So that's all fueling optimism that the Federal Reserve is going to cut interest rates by the end of their September meeting.

However, traders now anticipate just a 25 basis point cut rather than that 50 basis point cut because we still have some very sticky areas of the economy where inflation is just not moving in the direct, that many want to move.

What the fed really wants to see is shelter, come down more significantly.

We've seen hot month, over month core readings.

So that's all boosting optimism that it's probably going to be 25 basis points, not 50.

But we have heard from fed officials that the amount of a cut doesn't really move the needle that much.

It's really about the pace of a cut so that you can all lifting the market.

You can listen to fed officials.

I also listen to Nick Tim over at the general.

Right?

Ok. And when Nick writes, I pay attention and I, I thought it was just interesting when Nick's latest Nate's article, what he's saying, I mean, you're right to say next week it's all about, is it gonna be a traditional 25?

You can get the super size 50.

Nick is saying it's actually kind of a close call.

And I thought that was a really interesting headline that, that may explain some of the market moves we saw today too.

It's also interesting because I feel like over the past year, we've known what the fed is going to do, right?

Likely hold rate, steady, hold, rate, steady.

I'm curious if we do see a 50 basis point cut rather than a 25 how will markets react?

Because there's been this thinking that markets actually wouldn't react that well to a 50 basis point cut.

But we'll have to see next week, next, take away, next, take away commodities corner because commodities did rally today.

I want to take a look at gold prices hitting another record high.

We're seeing gold trade just under $2600 and ounce and gold year to date has really outperformed here up more than 25% outperforming the broader markets.

This is obviously ahead of that, expected that rate cut next week.

And then we've seen rising geopolitical tensions as we typically see gold operate that safe haven asset for a lot of investors, but it wasn't just gold that caught my eye today.

I also want to look at crude oil.

We saw crude finished the day up just about 3%.

Now this comes as we've seen more crude disruption in the Gulf of Mexico due to hurricane Francine here to date though crude is down about 2% at this point as those demand concerns really are continuing to weigh on this market at large.

So we'll see where oil prices move in the future that, that the fact that we are below $70.

That was a technical level that a lot of Wall Street analysts were saying to watch.

We'll see where we could see crude over the long term record us production.

We Chinese demand.

It's been the story.

Thank you all.