Wall Street Rises on Rate-Cut Hopes, Eyes Key Inflation Report

U.S. stock futures climbed Friday as investors looked ahead to a crucial inflation report and embraced rising expectations that the Federal Reserve could cut rates as early as July.

The S&P 500 and Nasdaq were poised for record highs, buoyed by Personal Consumption Expenditures (PCE) data due later in the morning—widely regarded as the Fed’s preferred inflation gauge. Investors are betting that cooling inflation and rising jobless claims will pressure the Fed to ease up on policy tightening.

Adding to the dovish sentiment was a report that President Trump may announce a replacement for Fed Chair Jerome Powell by September or October, raising speculation that the central bank could soon take a more aggressive easing stance.

Data Paints a Slower Economy
This week’s economic data has only added fuel to the rate-cut fire:
-Q1 GDP came in weaker than expected.
-Jobless claims hit multi-year highs.

Traders now see a 20% chance of a July cut, up from just 12.5% the week before, according to CME FedWatch.

By early morning:
-Dow futures were up 103 points (0.24%)
-S&P 500 futures rose 15 points (0.24%)
-Nasdaq 100 futures added 70.25 points (0.31%)

Corporate Movers: Nike and Lululemon Surge
Nike led the charge with a 9.6% gain in premarket trading after forecasting a smaller-than-feared drop in Q1 revenue. The rally spilled over to Lululemon, which added 1.7%. Both helped lift broader retail sentiment just as inflation and tariff concerns dominate consumer sector outlooks.

Meanwhile, the White House struck a deal with China to fast-track rare earth shipments, easing supply concerns and helping sentiment across tech and manufacturing stocks just days before Trump’s July 9 tariff decision deadline.

Bottom line: Wall Street is betting the Fed’s next move will be a cut, not a hike—and Friday’s inflation print could tip the scale. With Powell’s leadership under the microscope and data flashing slowdown, the rate-cut drumbeat is only getting louder.