Wall Street Rallies Amid Shutdown Speculations; Investors Eye Fed's Next Move
Wall Street's main indexes are set to open higher as investors disregard Federal Reserve's hawkish comments and focus on a potential government shutdown. The Fed's data-dependent approach is challenged by possible key economic data release stalls. Cannabis stock rises and mergers uplift market sentiments.
As a new week unfolds, Wall Street's main indexes were set to open higher on Monday morning. Investors appeared to brush off hawkish remarks from a Federal Reserve official and are instead weighing the possible implications of a looming government shutdown. Last Friday's inflation figures aligned with expectations, reigniting hopes for future rate cuts.
The Federal Reserve's Cleveland President, Beth Hammack, maintained a hawkish stance, pressing for continued restrictive monetary policies to cool inflation. Despite Hammack's comments, market traders are largely betting on a 91.4% likelihood of a 25-basis-point rate cut at the upcoming Fed meeting. As of Monday morning, Dow, S&P 500, and Nasdaq 100 E-minis reflected this optimism, showing significant gains.
Political tension adds another layer of complexity as a funding disagreement between Republicans and Democrats could trigger a government shutdown on the first day of the 2026 fiscal year. Analysts highlight the risk of significant economic data being delayed, which could obscure the Fed's data-driven policy decisions at a crucial market phase. Meanwhile, mergers and sector-specific developments, including cannabis stock activities and biotech acquisitions, are making waves in the market.
(With inputs from agencies.)
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