Stocks Close in the Green as Latest Economic Data Boosts Rate Cut Expectations for September | Wall Street Today

Stocks closed higher, with new economic data strengthening expectations for a Federal Reserve rate cut in September. The Dow touched a new record above 40,000 since late May.

Consumer sentiment and expectations among Democrats dropped to the lowest level in more than a year following President Joe Biden’s poor performance in June’s presidential debate.

The University of Michigan’s sentiment index fell to 82.5 in early July, down from 90.8 in June, according to figures released Friday.

Also, bond traders are ramping up bets that the Federal Reserve will cut interest rates by half a percentage point in September instead of the standard quarter-point increment.

Oil futures posted a decline on Friday to tally their first weekly loss in five weeks as traders weighed this week's U.S. inflation data, prospects for supplies and the latest signs of demand.

A cooler-than-expected U.S. June consumer-price index reading this week reinforced expectations for the Federal Reserve to begin cutting interest rates later this year, feeding forecasts for higher energy demand and providing support for oil prices in the previous session.