The US benchmark equity indices experienced a notable surge on Monday, buoyed by investors' assessments of the latest consumer inflation expectations survey and the increasing likelihood of an interest rate cut in the forthcoming week. According to the Federal Reserve Bank of New York, US consumers' inflation expectations for the medium-term horizon exhibited a rebound in August, while the outlooks for one and five years remained stable.
Concurrently, the labor market outlook presented a mixed but predominantly stable scenario, as indicated by the New York Fed. Investors are eager to see upcoming government data, projected to reveal a modest increase in US consumer inflation of 0.2% month-on-month and an annual rate of 2.6% for the previous month, as compiled by Bloomberg's consensus forecast.
The official report detailing producer prices for August is set to be released on Thursday. Additionally, the odds of a 25-basis-point interest rate cut next week have risen to 73% as of Monday, an increase from 70% recorded on Friday. Conversely, the likelihood of a more substantial 50-basis-point reduction has decreased to 27% from 30%, as reported by the CME FedWatch tool.
In related market movements, October West Texas Intermediate (WTI) crude oil prices increased by $1.04, closing at $68.36 per barrel. Additionally, November Brent crude, recognized as the global benchmark, observed a rise of $0.91, settling at $71.97. Notably, shares of Boeing ($BA) escalated by 3.6% after the aircraft manufacturer announced a tentative labor agreement with the International Association of Machinists and Aerospace Workers, which represents over 33,000 employees.
Meanwhile, Progress Software ($PRGS) disclosed its decision to acquire the software-as-a-service document collaboration platform, ShareFile, from Cloud Software Group for a transaction valued at $875 million. Following this announcement, Progress shares experienced a decline of 1.8%. An insightful week lies ahead as investors remain vigilant on inflation readings and central bank signals that will further guide market trajectories..