Stocks Settle Higher as Bond Yields Fall and Chip Makers Climb

Market Overview - Markets are pricing in a 15% chance of a 50 basis point rate cut at the upcoming FOMC meeting on September 16-17, up from a previous expectation of zero [1] - After the anticipated 25 basis point cut at the same meeting, there is now an 81% chance of a second 25 basis point cut at the October 28-29 meeting, an increase from 54% [1] - Overall, markets are expecting a total reduction of 76 basis points in the federal funds rate by year-end, bringing it down to 3.62% from the current 4.38% [1] Economic Indicators - The BLS will release annual benchmark revisions to US payrolls through March, with August PPI final demand expected to rise by 3.3% year-over-year, unchanged from July [2] - August CPI is anticipated to increase to 2.9% year-over-year from 2.7% in July, while CPI excluding food and energy is expected to remain at 3.1% [2] - Initial unemployment claims are projected to decrease by 3,000 to 234,000 [2] Trade and Tariff News - Weaker-than-expected trade data from China shows August exports rose by 4.4% year-over-year, below the expected 5.5%, and imports increased by 1.3%, also below the anticipated 3.4% [2] - A federal appeals court ruled that President Trump exceeded his authority by imposing global tariffs without Congressional approval, but the tariffs will remain in place during appeals [2] - If the announced rates are implemented, the average US tariff is expected to rise to 15.2%, up from 13.3% earlier, significantly higher than the 2.3% in 2024 before the tariffs were announced [2] Stock Market Performance - US stocks closed higher on Monday, driven by expectations of a more accommodative Federal Reserve, with the S&P 500 Index up by 0.21%, Dow Jones up by 0.25%, and Nasdaq 100 up by 0.46% [2] - Chip stocks rallied, with Marvell Technology and Broadcom both closing up more than 3% due to news of collaboration with OpenAI [8] - AppLovin surged over 11% after being announced as a replacement for Caesars Entertainment in the S&P 500 [9] Company-Specific Developments - Forward Industries closed up more than 54% after securing $1.65 billion in commitments for a private investment in public equity offering [10] - EchoStar rose over 18% following SpaceX's agreement to purchase wireless spectrum for about $17 billion [10] - Robinhood Markets increased by more than 15% after being announced as a replacement for MarketAxess Holdings in the S&P 500 [11] - CVS Health Corp fell over 3% after lack of details on upcoming quality ratings and financial guidance during a private investor meeting [12]