Key Takeaways:
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- S&P 500 futures down 0.3%, Nasdaq 100 futures fall 0.5%
- Treasury yields pare gains after surprise jump in jobless claims
- ECB cuts rates by 25 basis points as expected
- Adobe drops 10% on weak guidance; Uber gains on positive outlook
What Happened?
Markets pulled back as fresh economic data painted a mixed picture of the economy. Weekly jobless claims rose more than expected to 242,000, while producer price data showed persistent inflation pressures. The European Central Bank delivered its anticipated quarter-point rate cut, while Switzerland surprised markets with a larger 50-basis-point reduction.
Why It Matters?
The market reaction reflects growing uncertainty about the pace and timing of rate cuts in 2024. While the Fed is expected to cut rates next week, signs of sticky inflation could lead to a more cautious approach to monetary easing than markets currently expect.
What’s Next?
All eyes are now on next week’s Federal Reserve meeting, where markets expect a quarter-point rate cut. Investors will closely watch the Fed’s guidance about future rate moves and its assessment of inflation risks.
