Wall Street Edges Up as Weak Economic Data Fuels Rate Cut Hopes
U.S. stock index futures enjoyed a late-night lift on Tuesday as a flurry of lackluster economic data fueled optimism that the Federal Reserve might soon have to cut interest rates to prop up growth.
This sentiment sent Treasury yields tumbling and nudged investors toward riskier assets, though with a touch of hesitation. The fear of a faltering U.S. economy kept overall risk appetite in check.
By 19:29 ET (23:29 GMT), S&P 500 Futures edged up 0.1% to 5,309.50 points, Nasdaq 100 Futures gained 0.1% to 18,725.75 points, and Dow Jones Futures ticked up 0.1% to 38,840.0 points.
Wall Street’s Tepid Tango: Job Data Sparks Rate Cut Hopes
Wall Street tiptoed higher on Tuesday after data revealed U.S. job openings in April sank to a three-year low, joining Monday’s dismal purchasing managers index and last week’s downgraded GDP report in painting a picture of economic sluggishness.
The limp labor data, arriving just before the crucial nonfarm payrolls report, which serves as a key barometer for the Fed, added another layer of intrigue. Inflation may still be a thorny issue, but labor market strength is equally pivotal in the Fed’s rate cut calculus.
Traders were seen boosting the odds of a 25 basis point rate cut in September to 55%, up from 52.6% the previous day, according to the CME Fedwatch tool. Bets on a potential July rate cut also saw a minor uptick, although the consensus still favored a hold. The Fed’s next meeting, slated for next week, is widely expected to maintain the status quo on rates.
Wall Street Wobbles Amid Rate Cut Hopes and Economic Jitters
Hints of eventual interest rate cuts lent some buoyancy to Wall Street, though concerns about a cooling U.S. economy kept enthusiasm tempered. The S&P 500 inched up 0.2% to 5,291.34 points, the NASDAQ Composite climbed 0.2% to 16,853.74 points, and the Dow Jones Industrial Average outperformed, rising nearly 0.4% to 16,853.74 points.
HPE and CrowdStrike: Earnings Champions
In aftermarket action, Hewlett Packard Enterprise Co (NYSE dazzled with an 18% surge following robust quarterly earnings and a rosy outlook powered by AI demand. Cybersecurity firm CrowdStrike Holdings Inc (NASDAQ jumped nearly 7% after upping its annual guidance on the back of stronger-than-expected earnings.
FDA Panel Rejects MDMA Therapy for PTSD, Citing Concerns Over Data and Risks
In a blow to the burgeoning field of psychedelic treatments, advisers to the U.S. Food and Drug Administration voted overwhelmingly against an MDMA-based therapy for PTSD on Tuesday. The panel, with a resounding 10-to-1 vote, determined that the treatment’s benefits did not outweigh its risks. Additionally, nine members expressed doubts about the therapy’s effectiveness based on the available data.
The panel’s deliberations were rife with concerns about the trial methodologies and the reliability of the collected data. “It’s like a game of Jenga with the data – one or two pieces missing might be fine, but when the whole tower’s wobbling, you’ve got problems,” quipped Melissa Barone, a panel member who voted against the treatment.
While the FDA is not obligated to heed the panel’s advice, it typically does and is expected to reach a final decision by August.
MDMA, commonly known as ecstasy or molly, has been championed by some as a promising treatment for mental health disorders, offering potential beyond its notorious party drug reputation. The rejected treatment, a capsule form of MDMA developed by Lykos Therapeutics, was designed to be used in conjunction with talk therapy sessions administered by licensed mental health providers.
Despite the hopeful buzz, notable organizations such as the Institute for Clinical and Economic Review (ICER) and the American Psychological Association had previously deemed the evidence supporting MDMA-assisted PTSD treatment as “insufficient.” An ICER report also flagged concerns about inappropriate therapist behavior during a mid-stage study, an issue that troubled many panelists.
Adding to the skepticism, staff reviewers noted on Friday that the distinctive effects of MDMA made it obvious to patients whether they were receiving the drug or a placebo, thereby skewing the trial results.
The FDA highlighted a “striking lack” of documentation regarding abuse-related adverse events, complicating the agency’s assessment of MDMA’s safety profile. “Supporting something with this many reported harms would be irresponsible,” remarked patient representative Elizabeth Joniak-Grant.
Nonetheless, more than 190 patients who received MDMA in conjunction with therapy experienced a significant reduction in PTSD symptoms compared to those given a placebo.
“We are disappointed in today’s vote given the urgent unmet need in PTSD,” said Lykos CEO Amy Emerson (NYSE) in a statement.
PTSD affects 13 million Americans, with a high prevalence among war veterans. For now, the quest for an effective MDMA-based treatment faces a challenging path forward.
Investing midweek is like catching a matinee showing—it’s less crowded, often cheaper, and you might just catch a hidden gem before the critics weigh in. It’s the sweet spot where Monday’s market jitters have settled and Friday’s profit-takers haven’t swooped in yet. So, while everyone else is stuck in the hump day blues, savvy investors are busy making moves, turning those midweek doldrums into a dance of dividends and capital gains.