'Soft landing' hopes are back to lift US stocks after recession scare

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'Soft landing' hopes are back to lift US stocks after recession scare

NEW YORK - Hopes for an economic soft landing are once again powering U.S. stocks higher, as encouraging data relieve recession worries following a brutal sell-off earlier this month.has rebounded more than 6% since Aug. 5, when a steep drop pushed the benchmark U.S. index to its biggest three-day slide in over two years.

"There was a real growth scare that had emerged," said Mona Mahajan, senior investment strategist at Edward Jones."Since then, what we've seen is the economic data has actually come out in a much more positive light."has gained more than 14%. Small-cap shares, which had been strong performers in July, have also recovered from recent lows, with the

As of late Thursday, futures tied to the Fed funds rate showed traders pricing a 25% chance that the central bank will lower rates by 50 basis points in September, down from around 85% on Aug. 5, CME FedWatch data showed. The probability of a 25 basis point cut stood at 75%, in line with expectations that the Fed will kick off an easing cycle in September.

The Fed's plans could become clearer next week when Chair Jerome Powell speaks at the central bank's annual economic policy symposium in Jackson Hole, Wyoming.

 

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