Wall Street's Rollercoaster: Rate Cut Hopes Spark Recovery

U.S. stock index futures saw a modest rise as traders anticipated possible Federal Reserve rate cuts following dismal U.S. payroll data. FedWatch tool estimates a high probability of a 25-basis-point cut, while brokerages revise forecasts amid heightened fears of an economic slowdown.

On Monday, U.S. stock index futures experienced a slight uptick, recovering from Wall Street's previous session dip. This was largely driven by optimism that the Federal Reserve might lower borrowing costs in response to disappointing labor market figures.

Friday's nonfarm payroll report underscored a weakening jobs market, prompting traders to anticipate a 25-basis-point rate cut, with current bets standing at a 90% assurance rate according to the CME Group's FedWatch tool. The possibility of a significant 50-bps cut has also entered discussions.

Amid fears that these figures might signal an impending economic slowdown, major brokerages like Barclays and Standard Chartered have recalibrated their interest rate cut projections. Inflation data, affected by tariffs, remains a focal point as markets try to navigate without fresh guidance due to the Fed's pre-meeting blackout period.

(With inputs from agencies.)