The S&P 500 and Nasdaq Composite both closed at record highs on Monday, with the S&P 500 adding 0.1% and the Nasdaq Composite rising 0.3%. The Dow Jones Industrial Average, however, erased earlier session gains to slip 0.1%.
The bets on a September rate cut from the Federal Reserve were prompted by a continued cooling in the labor market, as signaled by the jobs report. This led to an influx of bets, with about 3 in 4 traders expecting a cut in September, according to the CME FedWatch tool.
The latest Consumer Price Index (CPI) is expected to show that inflation rose 3.1% over the year, down from a 3.3% annual increase in May. This would match the lows where the CPI started the year. Core inflation, which excludes food and energy prices, is expected to have stayed at a 3.4% annual increase, the same as in May.