Wall Street Set to Open Higher as Rate Cut Hopes Grow

US stock indexes are poised to rise at the opening bell as expectations build that the Federal Reserve will cut interest rates.

Wall Street’s three major indexes posted declines in February, with the Nasdaq nearing a 10% drop from its all-time high.

Meanwhile, Donald Trump escalated trade tensions, announcing new tariffs on Canada and Mexico set to take effect tomorrow, along with an additional 10% levy on Chinese imports.

However, signs of weakening consumer demand have fueled concerns about a potential slowdown in the US economy, leading traders to increase bets that the Fed will cut interest rates at least twice this year—a move generally seen as bullish for stocks.

In premarket trading, the Dow Jones Industrial Average rose 0.2%, the S&P 500 gained 0.4%, and the Nasdaq 100 climbed 0.5%.

US defence stocks also advanced, with RTX up 2.1% and Lockheed Martin rising 1.1% following the US approval of a $3 billion (£2.4 billion) arms deal to Israel.

FTSE 100 Extends Gains as Defence Stocks Lead European Markets

The FTSE 100 continues to rise through the morning, up 0.7%, though trailing behind stronger gains on the continent. Germany’s DAX is up 1.2%, while France’s CAC has gained 0.9%.

Defence stocks are driving the rally, with Rheinmetall leading in Frankfurt, Dassault in Paris, BAE Systems in London, and Kongsberg in Oslo all posting strong gains.

Citi analysts note: “There is a clear consensus in Europe that a peace deal negotiated solely between Russia and the US is unlikely to hold, risking a repeat of the failed Minsk agreements.

Ultimately, if Europe aims to secure a ‘just and lasting’ peace for Ukraine, it will need to provide significant military capabilities. Military restocking and the recapitalization of the defence industrial base are increasingly emerging as pan-European fiscal priorities.”