US stock futures rise amid Trump speculation, rate cut cheer

Investing.com-- U.S. stock index futures rose in evening deals on Monday, extending gains from the session amid increasing optimism over interest rate cuts, while bets on Donald Trump securing a second term also grew. 

Wall Street largely shrugged off any political uncertainty stemming from an assassination attempt on Trump at a Pennsylvania rally over the weekend. Initial reactions to the shooting were that it stood to increase Trump’s chances of winning the 2024 presidential race. 

Dovish-leaning comments from Federal Reserve Chair Jerome Powell buoyed markets, with traders pricing in an even greater chance the central bank will cut interest rates in September. 

Sentiment was also supported by stronger-than-expected earnings from Wall Street major Goldman Sachs Group Inc (NYSE:GS), which extended a parade of mostly positive bank earnings. 

S&P 500 Futures rose 0.2% to 5,693.50 points, while Nasdaq 100 Futures rose 0.3% to 20,641.75 points by 19:39 ET (23:39 GMT). Dow Jones Futures rose 0.2% to 40,576.0 points. 

Trump names running mate as shooting boosts presidential odds 

Trump on Monday was officially nominated as the Republican frontrunner for the 2024 presidential race, and named Ohio Senator J.D. Vance as his vice presidential running mate.

Trump’s chances of a victory were seen increasing sharply after the shooting over the weekend, with a Trump presidency presenting the prospect of a looser regulatory environment in the country. Trump Media&Technology Group Corp (NASDAQ:DJT) jumped over 30% after the attack, but saw some consolidation in aftermarket trade.

Guns and crypto stocks also advanced on the prospect of a Trump victory. 

Powell flags confidence in lower inflation, rate cut bets surge

The Fed’s Powell said that recent inflation readings had boosted the Fed’s confidence in lower inflation, ramping up bets that the central bank was close to cutting interest rates. 

Powell had earlier signaled that the Fed did not have to wait for inflation to reach 2% before cutting rates. His comments sparked a sharp increase in bets that the central bank will cut rates in September.

Traders were no longer seen pricing in the possibility of a hold in September, and were now looking at a 89% chance the central bank will cut rates by 25 basis points. Traders were also seen pricing in a small chance the bank will cut rates by 50 basis points, according to CME Fedwatch.

Optimism over rate cuts kept Wall Street indexes in sight of record highs. The S&P 500 rose 0.3% to 5,631.22 points, while the NASDAQ Composite rose 0.4% to 18,475.86 points on Monday. The Dow Jones Industrial Average rose 0.5% and marked a record-high close of 40,211.72 points.