Stocks Gain Pre-Bell as Fed Rate Cut Expectations Rise Following Latest Inflation Data

07:21 AM EDT, 08/13/2025 (MT Newswires) -- The main US stock measures were pointing higher in Wednesday's premarket activity amid increasing expectations that the Federal Reserve will lower interest rates next month after Tuesday's consumer inflation report.

The S&P 500 rose 0.2% in premarket activity, while the Dow Jones Industrial Average and the Nasdaq added 0.3% each. The indexes finished the previous trading session in the green, with the Nasdaq and the S&P 500 hitting fresh record highs.

Government data on Tuesday showed that consumer inflation in the world's largest economy slowed down in July on a sequential basis, while the annual core rate jumped above 3%.

"While inflationary pressures are heating up, the labor market has shown clear signs of weakening," TD Economics Senior Economist Thomas Feltmate said Tuesday. "With the policy rate still well in restrictive territory and inflation expectations remaining well anchored, the prudent move for the Fed is to prioritize the employment side of its dual mandate and provide some rate relief in the months ahead."

Currently, markets are widely expecting the central bank's Federal Open Market Committee to reduce its benchmark lending rate by 25 basis points at its next meeting in September, according to the CME FedWatch tool.

In a Tuesday social media post, President Donald Trump again called for Fed Chair Jerome Powell to lower rates. Kansas City Fed President Jeff Schmid said Tuesday that the central bank should maintain its monetary policy for now as inflation remains "too high," adding that the eventual impact of Trump's reciprocal tariffs "is almost impossible to anticipate."

Treasury yields declined before the open, with the two-year rate retreating 2.3 basis points to 3.71%, while the 10-year rate fell 3.9 basis points to 4.25%.

The official producer prices report for July is scheduled to be released Thursday, followed by the retail sales report for the same month on Friday. Wednesday's economic calendar has the weekly mortgage applications bulletin at 7 am ET, followed by the weekly EIA domestic petroleum inventories report at 10:30 am.

Richmond Fed President Thomas Barkin is expected to speak at 8 am, while Chicago Fed President Austan Goolsbee and Atlanta Fed President Raphael Bostic are also slated to speak Wednesday.

Shares of Cava (CAVA) tumbled 24% pre-bell after the Mediterranean restaurant chain cut its full-year same-restaurant sales growth outlook. CoreWeave (CRWV) dropped 9% after its quarterly results. Sapiens International (SPNS) soared 44% after the company agreed to be acquired and taken private by Advent in a $2.5 billion deal.

Venture Global (VG) , Elbit Systems (ESLT) , Performance Food Group (PFGC) , CAE (CAE), Brinker International (EAT) , Global-E Online (GLBE) and Madison Square Garden Entertainment (MSGE) report their latest financial results before the bell, among others. Cisco Systems (CSCO) posts earnings after the markets close.

West Texas Intermediate crude oil decreased 0.7% to $62.73 a barrel in premarket action. The Organization of the Petroleum Exporting Countries on Tuesday lifted its global oil demand projection for 2026 and raised its world and US economic growth forecasts for this year.

Gold inclined 0.5% to $3,416 per troy ounce, while bitcoin advanced 0.6% to $120,420.

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