U.S. Stocks Hit Record Highs as Fed Rate Cut Bets Hold Amid Inflation, Jobs Data

U.S. stock futures traded flat Thursday evening after Wall Street’s major indexes reached fresh record highs, as investors weighed stronger-than-expected inflation against signs of a cooling labor market.

At 20:10 ET (00:10 GMT), S&P 500 Futures stood at 6,593.25, Nasdaq 100 Futures at 24,019.75, and Dow Jones Futures at 46,144.0, all holding steady. Earlier, the S&P 500 gained 0.9%, the Dow Jones Industrial Average surged 1.4% past 46,000 for the first time, and the Nasdaq Composite advanced 0.7%.

The rally followed new economic data showing U.S. consumer prices rose 0.4% in August, the sharpest increase since January, lifting annual inflation to 2.9%. While inflation remains above the Federal Reserve’s 2% target, concerns are shifting toward the labor market as weekly jobless claims climbed to 263,000, the highest since 2021. This comes after last week’s disappointing nonfarm payrolls report, reinforcing expectations of a Fed rate cut at its September 16-17 meeting. Markets are pricing in a near-certain 25 basis point cut, with smaller odds of a larger move.

Analysts noted that while tariffs could keep inflation elevated, the Fed is prioritizing weakening employment trends. Rising jobless claims highlight increasing layoffs, with subdued hiring adding pressure on policymakers.

In corporate news, Warner Bros Discovery (NASDAQ:WBD) shares soared nearly 30% after reports that Paramount Skydance Corp (NASDAQ:PSKY) is preparing a majority-cash bid. Adobe (NASDAQ:ADBE) rose over 3% in extended trading after beating revenue and profit estimates, driven by demand for AI-powered tools, and raised its annual outlook. Kroger (NYSE:KR) posted stronger-than-expected earnings and lifted its full-year forecast, though shares remained flat. Centene Corp (NYSE:CNC) jumped more than 10% after reaffirming its 2025 earnings guidance.