What you need to know today

100% certainty
Traders are now certain that the Federal Reserve will cut interest rates by September, with a 93.3% probability of a quarter percentage point cut and a 6.7% probability of a half percentage point cut. This certainty stems from the recent consumer price index update, which showed annual inflation slowing to 3%, the lowest in three years. A month ago, the odds of a September rate cut were only around 70%.

Investors are turning to gold as a safe haven amid softer inflation data and dovish comments from Fed Chair Jerome Powell, boosting the likelihood of rate cuts this year. Gold futures settled up 1.6% higher at an all-time closing high of $2,467.8 per ounce. The precious metal also reached a fresh intraday record high of $2,474.5 during the session. Spot gold mirrored this surge, jumping 1.9% to hit an all-time high of $2,468.68 an ounce, according to LSEG data dating back to 1968.

Although net interest income fell 3% to $13.86 billion, as expected, the bank said it expects the measure to rise to $14.5 billion in the fourth quarter.

NII, a measure closely watched by shareholders, is the difference between what a bank earns on loans and what it pays depositors for their savings.

Last week, JPMorgan Chase, Wells Fargo and Citigroup each topped expectations for revenue and profit, a streak continued by Goldman Sachs on Monday and Morgan Stanley on Tuesday, helped by a rebound in Wall Street activity.

Global inflation threat
A second term for former President Donald Trump could spark global inflation, analysts warn. Trump’s America-first policies, characterized by high tariffs and low taxes, may drive up costs worldwide.

“Compared to 2016, when inflation had been low forever and inflation expectations were low ... 2024, 2025 is going to be very different,” Michael Metcalfe, head of macro strategy at State Street Global Markets, told CNBC’s “Squawk Box Europe.” “The level of inflation is higher, inflation expectations are higher, and we’re still in this inflation mindset.”