Philly Fed Manufacturing Optimism Best Since 1983: Here's Why - State Street SPDR S&P 500 ETF Trust (ARCA

The Federal Reserve is expected to raise interest rates by 0.25% to 3.75%-4.00% on Wednesday, with a 93% probability according to traders. The focus will be on the dot plot for future hikes, inflation and growth forecasts, and Fed Chair Kevin Warsh's press conference for hints on an October hike. ETFs like SPY, QQQ, TLT, GLD, and IBIT may see volatility.

President Trump demanded a Fed rate cut after August's jobs report showed 162,000 jobs added, far exceeding estimates. The Fed's likelihood of a rate hike in September increased to 60.2%. Economists debate the Fed's next move, with inflation data due before the FOMC meeting. Markets reacted negatively to the jobs report.

The U.S. added 162,000 jobs in August, far exceeding estimates of 56,000. Private payrolls rose by 127,000, while government payrolls added 35,000. The unemployment rate remained at 4.1%. Average hourly earnings increased 0.3% month-over-month, with an annual rate of 3.1%. The data boosted Fed rate hike expectations, causing Treasury yields to rise and stock futures to decline.

Private hiring slowed to 38,000 jobs in August, below estimates, but sectors like education and health services saw gains. Fed Chair Kevin Warsh remains focused on inflation, with a 66.2% chance of a rate hike in September. ADP data shows uneven labor market strength, with wage growth varying by sector. The S&P 500 rose 0.5% to 7,670 points.

U.S. military struck Iranian targets near the Strait of Hormuz, escalating tensions and raising oil prices. Brent crude rose 3.9% to $93.96, while WTI climbed 4.5% to $89.61. The U.S. Oil Fund (USO) gained 4.8%. President Trump confirmed the strikes, warning of stronger responses if Iran retaliates. U.S. equities, including SPY, QQQ, and DIA, declined.

Oil prices fell to a one-week low, with WTI crude down 3.2% and Brent crude down 2.92%, following the U.S. announcement of sweeping sanctions against Iran. The market reacted to reports suggesting reduced risk of immediate U.S.-Iran conflict escalation. Treasury yields slipped, and equities rose, with SPY up 0.48% and DAL up 2.12% in premarket trading.