Here are the most important news items that investors need to start their trading day:
1. Rate rally
After a selloff prompted by fears about the economy earlier this month, markets have largely been steady. The three major U.S. averages rose again Wednesday as investors anticipated an interest rate cut at the Federal Reserve’s September meeting. All eyes will to turn Federal Reserve Chair Jerome Powell’s comments Friday at the central bank’s Jackson Hole symposium for clues about how large the rate reduction could be. The S&P 500 and Nasdaq posted their ninth positive session in 10 on Thursday, while the Dow Jones Industrial Average had its sixth winning day in seven. Follow live market updates here.
2. Cutting in September?
A September interest rate cut looks all but certain. Minutes from the July meeting of Federal Reserve policymakers signaled the central bank will “likely” ease monetary policy if economic data continued about as expected. Many Fed officials appeared confident inflation was easing toward the bank’s 2% target, and others noted the labor market appeared to be weakening. The release of the Fed meeting minutes came hours after the Labor Department said the U.S. economy created 818,000 fewer jobs than initially reported in the 12 months through March. While the numbers still paint a picture of solid employment growth, they added fuel to expectations that the Fed will lower borrowing rates soon.
3. Electric fail
All along the U.S. auto industry, companies are scaling back electric vehicle ambitions. The latest move came Wednesday, when Ford said it would delay production of an electric truck at a new plant in Tennessee and scraps plans for a three-row electric SUV. The Detroit automaker said it would instead focus on hybrid models and commercial electric vehicles, in a move CFO John Lawler said would allow Ford to to “focus in where we have competitive advantage.” The company said it would take a special noncash charge of $400 million related to the move.
4. A mountain of offers
Paramount Global’s takeover saga is not done yet. The company extended the window in which it can receive competing offers to its merger agreement with Skydance by 15 days. The move comes as the company reviews a bid placed by media executive Edgar Bronfman Jr. On Wednesday, Bronfman increased his bid to a revised offer of $6 billion. Paramount agreed to merge with Skydance in July after months of talks.
5. Back on the bike
Peloton’s turnaround is starting to take hold. The connected fitness company’s shares spiked after it said it significantly cut losses in its fiscal fourth quarter and would focus on profitability over growth in the year ahead. Peloton also saw sales grow — only slightly — for the first time since its holiday quarter in 2021. The results come amid a shift in the fitness industry, as Peloton and rivals focus more on strength training to meet changing consumer habits.
