Today’s stock market: Stocks higher amid big Fed rate cut bets

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U.S. stock futures rose in early trading Friday, extending a solid week of gains for the S&P 500, as investors added to bets on an outsized Federal Reserve rate cut following two key inflation readings.

Stocks ended Thursday, leading the S&P 500 and the Nasdaq on a four-day winning streak, following a subdued reading of factory-gate inflation for August that was paired with the lowest CPI reading since February 2021 from the previous day.

The media reports, as well as comments from former New York Fed President Bill Dudley, sparked bets on a 50-basis-point rate cut from the central bank next week in Washington, sending Treasury yields lower and took the dollar to its lowest level of the year against the yen.

Fed Chairman Jerome Powell and his colleagues are considering a 50 basis point interest rate cut when they meet next week in Washington.

Andrew Harnik/Getty Images

“I think there’s a strong case for 50, whether they do it or not,” Dudley told a financial event in Singapore.

CME Group’s FedWatch now pegs the odds of such a move at 43 percent, well above the 14 percent level indicated in early Thursday trading.

Yields on the benchmark 2-year Treasury fell to 3.582% in overnight trade, with the 10-year falling to 3.648%.

The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.38 percent lower at 100.978.

Heading into early Wall Street trading, S&P 500-linked futures were priced up 15 points, with Nasdaq-linked futures up 25 points.

Related: CPI inflation report curbs big Fed rate cut bets

Dow Jones Industrial Average futures suggest a 92-point gain from the open despite a big 3.85% pre-market drop for Boeing (nay) .

The 33,000 members of the International Association of Machinists and Aeronautical Workers, the plane maker’s main union, voted last night to authorize the first labor strike since 2008.

Oracle (ORCL) Shares were also active, rising 5.8% to a new record high of $170.80 each after the cloud software group raised its full-year revenue guidance at an analyst meeting in Austin , Texas.

Adobe (ADBE) Shares, however, fell 8.25% after the graphics software specialist issued a tepid near-term forecast that overshadowed a solid third-quarter earnings report.

More Wall Street analysts:

• Analyst says Intel would have to divest a key business to survive
• Analysts are adjusting their price target on Bookings.com shares in the travel market
• Analysts are placing bets on Las Vegas casino stocks

In overseas markets, Europe’s Stoxx 600 rose 0.48 percent in Frankfurt following yesterday’s decision by the ECB, which cut the region’s benchmark borrowing cost to 3.5 percent but maintained forecasts for further cuts.

Overnight in Asia, a stronger yen capped gains for the Nikkei 225, which closed 0.68 percent lower in Tokyo, while MSCI’s regional benchmark ex-Japan rose 0.54 percent at the close, after last night’s rally on Wall Street.

Related: Veteran fund manager sees world of pain coming for stocks