S&P Futures Up 0.4% as Cool CPI Fuels Fed Cut Hopes
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- Futures on the S&P 500 rose 0.4% and Europe’s Stoxx 600 added 0.4% as banking shares rebounded from last week’s sharp decline.
- Cool CPI data reinforced expectations of multiple Fed rate cuts this year, with traders fully pricing a July cut and a strong chance of a June move.
- Andrea Gabellone of KBC Securities said the post‑CPI backdrop is positive for equities but warned of dispersion in AI‑exposed sector sentiment.
- JPMorgan’s AI basket team urged caution on software, business‑services and media stocks vulnerable to AI cannibalization, while Goldman launched a long‑AI/short‑non‑AI basket.
- Nataliia Lipikhina noted that companies are delivering about 13% earnings growth this season, supporting a positive outlook for the S&P.
- European banks such as NatWest rallied up to 4% after a price‑target raise, while basic‑resources stocks like Norsk Hydro fell 4.4% after downgrades.
- Asian markets slipped for a second day, with Japan’s Topix down 0.8% and Hong Kong’s Minimax Group surging 30% amid AI‑related trading.
Why it matters: The renewed Fed‑cut outlook lifts equities, benefitting banks and AI‑positive firms, while AI‑exposed companies and resource‑heavy stocks face pressure; investors will watch upcoming ADP payrolls and Fed minutes for clues on timing, making the market’s direction contingent on data and sector sentiment.
