{"id":12369,"date":"2025-09-12T19:35:06","date_gmt":"2025-09-12T19:35:06","guid":{"rendered":"https:\/\/www.newsbeep.com\/il\/12369\/"},"modified":"2025-09-12T19:35:06","modified_gmt":"2025-09-12T19:35:06","slug":"wall-streets-future-hinges-on-a-risky-bet-about-what-the-american-economy-will-do-next","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/il\/12369\/","title":{"rendered":"Wall Street’s future hinges on a risky bet about what the American economy will do next"},"content":{"rendered":"

Wall Street is coasting toward the finish of its best week in the last five on Friday as U.S. stocks hang near\u00a0their record levels<\/a>.<\/p>\n

The S&P 500 rose 0.1% from the all-time high it set the day before. The Dow<\/a> Jones Industrial Average was down 188 points, or 0.4%, as of 2:05 p.m. Eastern time, and the Nasdaq<\/a> composite was 0.5% higher. Both likewise set records the day before.<\/p>\n

Stocks have rallied with expectations that the\u00a0Federal Reserve will cut its main interest rate<\/a>\u00a0for the first time this year at its meeting next week. Such a move would give the economy a kickstart, and\u00a0mortgage rates have already dropped<\/a>\u00a0in anticipation of it.<\/p>\n

Expectations for a cut have built as recent reports suggested the U.S. job market could hit the precise balance that Wall Street has been betting on:\u00a0slowing enough<\/a>\u00a0to convince the Fed that it needs help, but not so weak that it will mean a recession, all while\u00a0inflation<\/a>\u00a0doesn\u2019t take off.<\/p>\n

A lot is riding on whether that bet proves correct. Stocks have already soared on it. And if the Fed ends up cutting fewer times than traders expect, including three this year, the market could retreat in disappointment. That\u2019s even if everything else goes right and the economy does not fall into a recession and President Donald Trump\u2019s tariffs don\u2019t send inflation much higher.<\/p>\n

Investors, \u201cand I think the Fed, are convinced that we are not on the verge of a surge in inflation,\u201d according to Scott Wren, senior global market strategist at Wells Fargo<\/a> Investment Institute.<\/p>\n

A survey from the University of Michigan on Friday suggested expectations for inflation may not be worsening among U.S. consumers. Preliminary data suggested they\u2019re bracing for inflation of 4.8% in the upcoming year, the same as they were a month earlier.<\/p>\n

Expectations for inflation over the longer term crept higher, though they\u2019re still below where they were in April, when Trump announced his worldwide tariffs.<\/p>\n

Record highs for Wall Street<\/p>\n

In the meantime, Wall Street continues to drift around its record heights.<\/p>\n

RH<\/a> fell 4.7% after the furniture retailer reported profit and revenue for the latest quarter that came up short of analysts\u2019 expectations. It also trimmed its forecasted range for revenue this fiscal year amid what CEO Gary Friedman called \u201cthe polarizing impact of tariff uncertainty and the worst housing market in almost 50 years.\u201d<\/p>\n

Oracle<\/a> sank 4.1% and was one of the day\u2019s heaviest weights on the S&P 500 index. But that shaved only a bit off its surge from earlier in the week, when it soared to its best day on 1992 amid excitement about multibillion dollar contracts signed related to artificial-intelligence technology.<\/p>\n

Another company that\u2019s benefited from the AI frenzy, Super Micro Computer<\/a>, rose 2.9% after saying it\u2019s begun high-volume shipments of racks using Blackwell Ultra equipment from Nvidia<\/a> that can be used for AI.<\/p>\n

Global markets<\/p>\n

Microsoft<\/a> climbed 2% after\u00a0European Union regulators accepted<\/a>\u00a0the tech giant\u2019s\u00a0proposed changes<\/a>\u00a0to its Teams platform, resolving a long-running antitrust investigation.<\/p>\n

The European Commission said Friday that Microsoft\u2019s final commitments to unbundle Teams from its Office software suite, including further tweaks following a market test in May and June, are enough to satisfy competition concerns.<\/p>\n

In stock markets abroad, indexes edged lower in Europe after rising in much of Asia.<\/p>\n

Japan\u2019s Nikkei 225 climbed 0.9% to another record, while Hong Kong\u2019s Hang Seng rallied 1.2% for two of the bigger moves.<\/p>\n

In the bond market, the yield on the 10-year Treasury climbed to recover some of its drop from earlier in the week. It rose to 4.07% from 4.01% late Thursday.<\/p>\n

Trump vs. The Fed<\/p>\n

Yields have been mostly sinking as expectations built on Wall Street that the Fed will resume cutting rates soon.<\/p>\n

The Fed has been on hold through 2025, mostly because of the risk that Trump\u2019s tariffs could send prices for all kinds of U.S. household purchases much higher. Lower interest rates can make inflation even worse.<\/p>\n

That inaction, though, has infuriated Trump. He has threatened to fire Fed Chair Jerome Powell, whom he has nicknamed \u201cToo Late,\u201d and has escalated his attempt to fire\u00a0Federal Reserve Governor Lisa Cook<\/a>, accusing her of mortgage fraud.<\/p>\n

On Thursday, the Trump administration asked an appeals court to remove\u00a0Cook<\/a>\u00a0from the Federal Reserve\u2019s board of governors by Monday, before the central bank announces its next decision on interest rates Wednesday. Trump initially sought to\u00a0fire Cook Aug. 25<\/a>, but a federal judge\u00a0ruled late Tuesday<\/a>\u00a0that the removal was illegal and reinstated her to the Fed\u2019s board.<\/p>\n

___<\/p>\n

AP Writers Teresa Cerojano and Matt Ott contributed.\n<\/p>\n

Fortune Global Forum returns Oct. 26\u201327, 2025 in Riyadh. CEOs and global leaders will gather for a dynamic, invitation-only event shaping the future of business. Apply for an invitation.<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Wall Street is coasting toward the finish of its best week in the last five on Friday as…\n","protected":false},"author":2,"featured_media":12370,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[1577,114,54,4318,85,932,12980,46,4487,265,190,4315,12981,11147,196],"class_list":{"0":"post-12369","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-markets","8":"tag-bonds","9":"tag-business","10":"tag-donald-trump","11":"tag-federal-reserve","12":"tag-il","13":"tag-inflation","14":"tag-interest-rate","15":"tag-israel","16":"tag-jerome-powell","17":"tag-jobs","18":"tag-markets","19":"tag-tariffs","20":"tag-tariffs-and-trade","21":"tag-u-s-jobs-report","22":"tag-wall-street"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/12369","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=12369"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/12369\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/12370"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=12369"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=12369"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=12369"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}