Stocks set to roar following first rate cut of 2025

Core Viewpoint - U.S. stock futures are rising following the Federal Reserve's first interest rate cut of 2025, indicating a bullish sentiment in the market as investors anticipate further cuts later this year [1][2]. Group 1: Federal Reserve Actions - The Federal Reserve cut the federal funds rate by 25 basis points, bringing it to a range of 4.00%-4.25% [2]. - Updated projections from the Fed suggest two additional rate cuts are likely in October and December [2]. Group 2: Economic Conditions - Fed Chair Jerome Powell acknowledged a weakening economic backdrop, noting rising unemployment, softened labor demand, and slowed consumer spending, which have negatively impacted GDP growth [3]. - Powell described the housing market as "weak" and indicated a simultaneous cooling in both labor supply and demand [3][5]. - Inflation remains elevated, influenced by tariffs that may be temporary but could persist, creating a challenging economic situation [4]. Group 3: Market Reactions - Despite economic risks, the S&P 500 closed above 6,600 for the first time and is poised to cross 6,700 if futures gains hold [6]. - The market is interpreting weaker job numbers as beneficial for corporate margins, leading to what some strategists refer to as a "jobless expansion" [6]. - Lower interest rates and the expectation of further cuts are contributing to the rise in stock prices [6].