Wall Street gains as weak services data raises rate-cut expectations

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Will the Fed cut rates? The markets thought so as they recovered to snap a two-day losing streak

The market dropped after the Institute for Supply Management said its non-manufacturing activity index fell to a reading of 52.6 in September, the lowest since August 2016.

Stock prices bounced back from the dour economic data as bets on a third U.S. rate cut this year at Fed’s October policy meeting surged to 90% from 40%, according to CME Group’s Fed Watch tool. Traders are again expecting at least two more rate reductions by the end of 2019, which they had abandoned after the central bank described each of its last two rate cuts as a “mid-cycle adjustment.” [MMT/]

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