Investing.com — Wall Street is poised to maintain its winning streak, buoyed by substantial inflows and optimism that Fed Chair Jerome Powell will indicate interest rate cuts at the Jackson Hole symposium this week.

1. Powell seen offering dovish tone at Jackson Hole

Confidence is returning to Wall Street as investors prepare for anticipated dovish comments from Fed Chair Jerome Powell at the U.S. central bank’s annual economic symposium in Jackson Hole, Wyoming.

Last week, markets recorded their best performance of the year, with significant inflows into the S&P 500 index following positive data that eased recession fears.

According to Evercore ISI analysts, Powell will likely frame the Fed’s plans for reducing rates during his Friday morning address, indicating the central bank’s readiness to implement significant cuts if necessary.

They predict Powell will reassure markets with a soft baseline of 25 basis point cuts, while suggesting a willingness to consider 50 basis point cuts if conditions allow.

Expectations are for Powell to affirm the Fed’s confidence in steering inflation back towards the 2% target, leading to possible rate reductions as early as September. However, specific guidance on whether the first move will be a 25bp or 50bp cut is not anticipated, as it may depend on forthcoming labor data.

The Fed has kept its benchmark overnight interest rate in the 5.25%-5.50% range since July of the previous year.

2. Futures set to continue winning streak

U.S. stock futures rose on Tuesday, extending a winning streak amid confidence that interest rate cuts from the Federal Reserve are imminent, which would bolster the economy.

As of 04:00 ET (08:00 GMT), Dow futures stood 40 points (0.1%) higher, S&P 500 futures climbed 6 points (0.1%), and Nasdaq 100 futures increased by 45 points (0.2%).

On Monday, major Wall Street indices closed higher, with the S&P 500 up nearly 1% and NASDAQ Composite up 1.4%. Both indices saw their eighth consecutive positive session, a notable milestone for the S&P 500 since November 2023 and the longest streak for the Nasdaq since December 2023. The Dow Jones Industrial Average gained 0.6%.

With little economic data scheduled for release on Tuesday, investors are focusing on the Federal Reserve’s recent meeting minutes on Wednesday and Powell’s Jackson Hole speech on Friday.

Earnings reports from home improvement retailer Lowe’s are anticipated while cybersecurity firm Palo Alto Networks saw its stock rise nearly 2% after exceeding earnings expectations for the fiscal fourth quarter.

3. Paramount Global receives another suitor

The battle for Paramount Global (NASDAQ:PARA) has intensified as media executive Edgar Bronfman Jr. has submitted a bid of approximately $4.3 billion to acquire National Amusements, the parent company of Paramount.

This bid poses a potential obstacle to a planned acquisition by David Ellison, CEO of Skydance Media.

Bronfman’s proposal includes $2.4 billion in debt and equity for National Amusements and will also inject $1.5 billion into Paramount’s balance sheet to address debt concerns.

Skydance secured an agreement last month to buy out the Redstone family’s controlling stake, which oversees Paramount Pictures, the CBS broadcast network, and MTV, with a 45-day “go-shop period” allowing evaluations of other offers. However, choosing another buyer incurs a $400 million break-up fee to Skydance.

4. Substantial inflows into S&P 500 index

Investor sentiment has shifted notably over the past week, leading to significant inflows into the S&P 500 index, underpinned by positive economic data that has boosted confidence.

Releases of the U.S. PPI and CPI have reassured investors regarding easing inflation, fostering a more optimistic economic outlook and alleviating concerns about prolonged inflation.

Citi analysts reported a rise in net positioning across U.S. indexes, with the S&P 500 welcoming substantial new long positions totaling nearly $18 billion.

While Nasdaq and Russell also experienced inflows, the amounts were smaller comparatively. This capital influx has coincided with a notable decrease in short positions, as the rally forced shorts into a loss situation. The pressure from long position losses on the Nasdaq has also diminished, improving the overall profit outlook for the index.

5. Crude slips after Gaza ceasefire progress

Crude prices declined on Tuesday as geopolitical risks eased following progress towards a potential ceasefire agreement in Gaza.

As of 04:00 ET, U.S. crude futures (WTI) fell 1% to $72.94 per barrel, while Brent crude prices dropped 1% to $76.88.

U.S. Secretary of State Antony Blinken indicated progress towards a ceasefire, which might reduce supply risks in this oil-rich region. However, concerns regarding demand from China linger, following the People’s Bank of China’s decision to maintain its benchmark loan prime rate amid disappointing economic data.

Investors are also awaiting the American Petroleum Institute’s estimate of U.S. crude stockpiles later in the session.