S&P 500 Hits Record as Fed Cut Bets Build

The S&P 500 closed at a record high as traders positioned for imminent Federal Reserve easing, with futures implying 66 basis points of cuts by year-end and slim odds of a half-point move next week. Taiwan’s benchmark index also reached an all-time peak while Japan’s Nikkei edged back toward Tuesday’s historic levels. In Europe, investors are watching Poland’s first downing of Russian drones over its airspace, Emmanuel Macron’s appointment of Sebastien Lecornu as prime minister, and the ECB’s policy decision expected to leave rates unchanged.

Equities

The FTSE 100 closed 0.2% higher on Tuesday, lifted by gains in energy and mining stocks. Anglo American surged 9.1% after agreeing a $53 billion merger with Canada’s Teck Resources to form a new company, Anglo Teck, which will keep its primary listing in London. Energy stocks tracked firmer oil prices, with BP rising 1.3% and Shell up 1%. Banks also advanced, led by NatWest and Barclays.

Burberry dropped 8.3% after management struck a cautious tone at a luxury goods conference. Retail stocks were weak, with Dunelm down 9.9% after warning that consumer demand had not shown sustained recovery. Other names under pressure included JD Sports and Howden Joinery. London Stock Exchange Group lost 4.7%, while Unilever slipped 1.5%. Computacenter gained 3.8% after flagging a strong start to the third quarter, and Phoenix Group added 1.8% after sharp losses the day before.

On Wall Street, the S&P 500, Nasdaq and Dow Jones each closed at record highs on Tuesday, up 0.27%, 0.37% and 0.43% respectively. UnitedHealth gained after confirming Medicare plan enrolments were in line with expectations, which could support higher government payments.

JPMorgan Chase rose 1.7% after a senior executive said investment banking revenue should grow in the low double digits in the third quarter, while markets revenue was set to rise in the high teens. Apple fell 1.5% after unveiling new iPhones that investors judged underwhelming, while Broadcom slipped 2.6% following five straight sessions of gains.

Artificial intelligence stocks made headlines, with Nebius soaring almost 50% after signing a $17.4 billion deal with Microsoft, while CoreWeave climbed 7%. Media shares dropped, with Fox down 6.7% and News Corp falling 4.5% after Rupert Murdoch and his family agreed a plan handing control to Lachlan Murdoch.

Forex & Commodities

The US dollar regained ground on Tuesday after a sharp selloff the previous day, strengthening against most major currencies except the yen. The euro fell to $1.1707 while sterling slipped to $1.3521. The dollar index climbed back to 97.78 after earlier touching a seven-week low. Gains were also registered against the Swiss franc, rising to 0.7976. The recovery followed news of a record downward revision to payrolls data, with the Bureau of Labor Statistics cutting nearly one million jobs from estimates for April 2024 to March 2025. Despite the scale of the adjustment, traders looked ahead to this week’s inflation releases rather than dwell on the revision. US rate futures late on Tuesday priced in a 92% chance of a 25 basis-point cut at the Federal Reserve’s September meeting, with a smaller probability of a 50-point move.

Spot gold held above $3,600 per ounce early this morning, standing at $3,644 after hitting a record $3,673 on Tuesday. The metal has risen 38% so far this year, supported by expectations of US monetary easing and continued central bank buying. Silver was quoted at $41.14, platinum at $1,383, and palladium at $1,148.

Oil prices firmed this morning after Israel struck Hamas leadership in Qatar and President Donald Trump urged the EU to impose tariffs on China and India to squeeze Russian oil sales. Brent crude was trading at $67.00 while West Texas Intermediate stood at $63.24. Analysts noted that fears of short-term disruption to supply boosted prices, although the broader outlook remains pressured by expectations of rising OPEC+ production.