Investors are betting the Federal Reserve will resume interest-rate cuts in September, nine months after its last reduction in December 2024. Such a long pause could be particularly bullish for equities,

Federal Reserve chairman Jerome Powell signaled a possible interest rate cut in the months to come, sending stocks sharply higher.

Jerome H. Powell said the “balance of risks” across the economy had started to shift, raising the odds the central bank lowers borrowing costs at its next meeting in September.