Pre-Market | Fed Signals Rate Cuts as Markets React to Economic Uncertainties

25 Aug., DOW FUTURES down 0.20% in pre-market, NASDAQ FUTURES down 0.32% in pre-market, S&P FUTURES down 0.23% in pre-market. Fed Chair Powell highlighted substantial downside risks to employment at the central bank conference, suggesting potential acceleration if declines occur, while inflation upside is seen as limited. He signaled imminent rate cuts and shifted to a simpler 2% inflation target framework, boosting market anticipation for a September reduction as per CME probabilities. This macro news aligns with the pre-market index declines by underscoring economic vulnerabilities.

In pre-market trading, PDD Holdings surged over 7.63% as its Q2 earnings exceeded market expectations. Alibaba's stock rose nearly 3.38% on the back of stronger-than-expected quarterly earnings. Meanwhile, Strategy dropped over 3.95% due to a negative analyst note, while British American Tobacco fell nearly 2.63% after institutional investor Invesco reduced its stake.

In pre-market trading, ESSA Pharma surged over 215%, driven by a strong earnings report that boosted investor confidence. OSR Holdings also saw a significant rise, up nearly 84%, on the back of positive earnings news. Meanwhile, ModivCare plummeted over 47% after filing for voluntary Chapter 11 bankruptcy protection. Nexalin Technology dropped nearly 17% due to negative impacts from competitors' news.

US August Markit Composite PMI preliminary data reached 55.4, a 9-month high, with manufacturing PMI at 53.3, the highest since May 2022, while services PMI dipped to 55.4. Federal Reserve Chair Powell signaled imminent interest rate cuts at the Jackson Hole symposium, citing heightened downside risks to employment and adopting a straightforward 2% inflation target. CME FedWatch data shows an 84.1% probability of a 25-basis-point rate cut in September.