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Hopes Are High For An Interest Rate Cut Next Month—Here's What To Know

1. S&P 500 and Nasdaq hit new record highs fueled by rate cut optimism. 2. 99.9% odds for a quarter-point interest rate cut next month reported. 3. Inflation slowed down with a 2.7% July YoY increase, supporting rate cuts. 4. VIX, Wall Street’s fear gauge, dropped to its lowest level of the year. 5. Job growth slowing may influence Federal Reserve's rate decisions soon.

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FAQ

Why Bullish?

Expectations of a rate cut typically energize equity markets, historically increasing S&P 500 performance. For instance, similar rate cuts in 2019 contributed to the S&P 500's subsequent rise.

How important is it?

Interest rate cuts have a direct influence on borrowing costs and business expansions, impacting major S&P companies' earnings potential.

Why Short Term?

The potential Fed rate cut is imminent, with announcements expected soon, likely boosting market sentiment immediately following such news.

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