Futures markets are also expecting a rate cut. Investors peg the chances of a quarter-point interest rate cut at nearly 96%, according to the CME FedWatch Tool, a measure of market sentiment.

There is heightened optimism the Federal Reserve will cut interest rates next month, with hopes boosted by a better-than-expected inflation report and Wall Street’s fear gauge falling to its lowest level this year, as the S&P 500 and Nasdaq jumped to new record highs Wednesday.

Fed cuts would immediately make borrowing cheaper on credit cards and auto loans, since those products are based on the short-term interest rates the central bank heavily influences. Mortgages are a different story,