Despite gloomy hiring figures, markets are still hanging tough—at least for now. US stock futures are holding close to recent highs as investors await this week’s crucial inflation data, expecting the Fed to cut rates at its September meeting. According to the FedWatch tool, markets now fully price in at least a quarter-point reduction, with odds of an even larger cut rising. Treasury yields have dropped sharply, with the 2-year yield falling below 3.5% for the first time in three years.
But are investors getting complacent? As Bloomberg notes, options traders are pricing in a serene path ahead, betting that rate cuts will prop up stocks—even as sticky inflation and troubling labor data threaten the outlook. Internationally, upbeat sentiment in US markets is tempered by turmoil abroad: French and Japanese political crises have rattled local markets, while global investors increasingly seek safety in gold (near record highs, up 37% year-to-date).
