Traders are now 100% certain the Federal Reserve will cut interest rates by September.

There are now 93.3% odds that the Fed’s target range for the federal funds rate, its key rate, will be lowered by a quarter percentage point to 5% to 5.25% in September from the current 5.25% to 5.50%, according to the CME FedWatch tool. And there are 6.7% odds that the rate will be a half percentage point lower in September, accounting for some traders believing the central bank will cut at its meeting at the end of July and again in September, says the tool. Taken together, you get the 100% odds.

The catalyst for the change in odds was the consumer price index update for June announced last week, which showed a 0.1% decrease from the prior month. That put the annual inflation rate at 3%, the lowest in three years. Odds that rates would be cut in September were about 70% a month ago.

The CME FedWatch Tool computes the probabilities based on trading in fed funds futures contracts at the exchange, where traders are placing their bets on the level of the effective fed funds rate in 30-day increments. Simply put, this is a reflection of where traders are putting their money. Actual real-life probability of rates remaining where they are today in September are not zero percent, but what this means is that no traders out there are willing to put actual money on the line to bet on that.

Fed Chairman Jerome Powell’s recent hints have also cemented traders’ belief that the central bank will act by September. On Monday, Powell said the Fed wouldn’t wait for inflation to get all the way to its 2% target rate before it began cutting, because of the lag effects of tightening.

The Fed is looking for “greater confidence” that inflation will return to the 2% level, he said.

“What increases that confidence in that is more good inflation data, and lately here we have been getting some of that,” added Powell.

The Fed next decides on interest rates on July 31 and again on Sept 18. It doesn’t meet on rates in August.

Zyn users, rejoice: Production is about to ramp up in the U.S.

Philip Morris International (PMI), Zyn’s parent company, announced Tuesday it would invest $600 million to build a new production facility in Aurora, Colorado, dedicated to manufacturing the popular nicotine pouches.

The move comes as Zyn has been subject to nationwide shortages as a result of its runaway success.

“PMI and its U.S. affiliates are accelerating their mission to move adults who smoke away from cigarettes in the U.S. by investing in new U.S. manufacturing capacity to meet the increasing demand for nicotine options that are scientifically substantiated as better alternatives,” said PMI Americas President and U.S. CEO Stacey Kennedy in a statement.

“We believe Colorado is likeminded in its commitment to innovation, economic opportunity and public health, and we’re eager to work with the state and its talented workforce as we expand our U.S. manufacturing presence.” 

The facility will be constructed over the course of two years, creating 500 direct jobs that pay an average annual salary of $90,000, with ongoing annual economic impact of $550 million and an additional 1,000 indirect jobs. PMI also estimates 1,000 construction jobs will be created as the factory is stood up.

Tuesday’s announcement comes on top of a previously stated plan to increase Zyn production at an existing facility in Kentucky to provide more immediate relief to address the shortage.

Amid its widespread adoption, Zyn has also begun to face questions about its safety. PMI has said its products have been scientifically supported as better alternatives to traditional cigarette use. The FDA’s official stance is that nicotine is addictive and can lead to continued use of tobacco, and that any tobacco or tobacco-alternative products like Zyn are illegal to sell to users under the age of 21.

The Dow Jones Industrial Average advanced on Monday as investors bet the unsuccessful assassination attempt on former President Donald Trump will lead to big gains for the Republican presidential candidate and the GOP at the polls in November.

Friendlier fiscal policies ahead were seen as further spurring a broadening out of the bull market that started to take shape last week. Small-cap shares and banks climbed on Monday.

The blue-chip Dow jumped 210.82 points, or 0.53%, to 40,211.72. The S&P 500 added 0.28% to 5,631.22. Both touched new intraday highs in the session, while the former also saw a record close. The Nasdaq Composite rose 0.4% to 18,472.57.

“The good news is that former President Trump was not injured more than the ear, that he was not killed,” said Sam Stovall, chief investment strategist at CFRA Research, on CNBC’s “Worldwide Exchange.” “As a result, I think the market will continue on its momentum ways.”

The Republican National Convention commenced Monday in Milwaukee, Wisconsin, with Trump leading President Joe Biden in national polls.

Humana and UnitedHealth Group each rose in the session. The insurers could benefit from fewer cost pressures coming from a Republican administration.

The Russell 2000 gained 1.8%, touching its highest level since 2022 and recording a fourth straight positive day. Goldman Sachs said a second Trump term could help small caps outperform, citing their strong record after his victory in 2016.

Goldman Sachs shares added 2.6% after posting earnings that exceeded analysts’ expectations. The SPDR S&P Bank ETF (KBE) and SPDR S&P Regional Banking ETF (KRE) both added more than 2%.

Goldman is one of the more than 40 S&P 500 companies reporting second-quarter earnings this week as the new season ramps up. This list also includes household names such as Bank of America, United Airlines and Netflix.

Beyond earnings, investors parsed comments from Federal Reserve Chair Jerome Powell, who said the central bank wouldn’t wait until inflation was at its goal of 2% before lowering interest rates. He also said a hard landing scenario was unlikely for the economy.

“We are getting very close to the point of the Fed … seeing the data that they need to see to be comfortable cutting rates,” said Bill Merz, head of capital market research at U.S. Bank Asset Management. “That’s what is the first and foremost thing in the psyche of the market.”

This story is part of CNBC Make It’s The Moment series, where highly successful people reveal the critical moment that changed the trajectory of their lives and careers, discussing what drove them to make the leap into the unknown.

Jay Chaudhry never thought he’d run a business, amass a fortune or help popularize an entire industry. Not growing up in rural India, not upon moving to the U.S. in 1980 to study engineering and marketing, not even after landing jobs at tech giants IBM and Unisys.

“I have no background of entrepreneurship in my family of small-scale farmers. So if you asked me, ‘Did I ever think about becoming an entrepreneur in my childhood [or] early years of my career?’ Not really,” Chaudhry, the billionaire founder and CEO of cloud security company Zscaler, tells CNBC Make It.

It took Silicon Valley’s dot-com boom — the wild success stories of tech startups like Netscape — to get Chaudhry thinking in 1996, “Why shouldn’t I start a company?” He made the rash decision to quit his job as an executive at Atlanta-based tech company IQ Software, and his wife Jyoti quit her job as a systems analyst at telecommunications giant BellSouth.

Together, they plunged their life savings — roughly $500,000 — into SecureIT, a cybersecurity software startup they co-founded in 1997. At the time, “maybe less than 5% of Fortune 500 companies had firewalls,” Chaudhry says. “Within 18 months, we had deployed firewalls in about 50% of [the] Fortune 500.”

His timing was perfect: In 1998, Chaudhry sold SecureIT to VeriSign in an all-stock deal worth nearly $70 million. Over the ensuing decade, the husband-and-wife duo founded two more cybersecurity companies and an e-commerce business, each of which got acquired.

By 2007, they were already wealthy entrepreneurs, and Chaudhry — who gets “bored” without something to work on — decided it was time to launch “one big company and put 200% focus on that,” he says.

That company was Zscaler, which aimed to help companies transition away from outdated firewalls and into the cloud era. The couple invested $50 million of their own money, says Chaudhry. Today, it brings in $1.6 billion in annual revenue and has a market value of roughly $30 billion.

Chaudhry’s own net worth is estimated at $11.5 billion by Forbes.

Here, Chaudhry talks about putting his family’s savings on the line to follow his gut, how his upbringing influenced his relationship with money and the advice he’d give someone who wants to quit their job to start a business.

CNBC Make It: What prompted you to stake your entire life’s savings on a startup idea — in an industry that didn’t really exist yet?

Chaudhry: This thing happened because I love to read and I love technology.

In 1996, Netscape had just launched and gone public, and I was fascinated by it. I said, “If [Netscape co-founder] Marc Andreessen could start a company — he was a young guy [right] out of college — why shouldn’t I start a company?”

My wife and I talked a few times, and the more we thought about it, the more conviction we got around it: [Netscape’s web browser] is the way to access information, and it should become popular. But if every company is connected to the internet, that means there will be security risks.

That was my simple thinking. There was no IDC or Gartner study about the market size. It was largely based on what the gut told us.

A gut feeling is one thing. Betting every dollar to your name is another.

It started out with us saying, “Let’s go get venture capital funding.” I had no experience raising funds, and I realized soon that it wasn’t that easy. This was [1996], Atlanta was not a VC mecca and we kept hearing, “Hey, you don’t have any experience.”

We were disappointed, but our conviction was building, which led to me saying, “Why don’t we put our life-savings on the line?”

I didn’t know anything. So, I really didn’t know how big the risk was. I couldn’t quantify it.

How did you make peace with that risk?

After talking back and forth, we asked each other, “What’s the worst thing that can happen?” The company could shut down, we’d lose all of our savings.

The next question was, “Can we find jobs?” There was lots of confidence that we could.

I never had money in my early childhood, so there was never a notion that I must buy A and B and C. Our lifestyle was pretty simple. Our house in Alpharetta, Georgia, was $200,000 — a nice, typical middle-class house at that time — and we didn’t have any fancy cars or fancy payments.

Our only child at that time was going to a public school. There wasn’t a lot of overhead. We said, “Let’s take a chance.”

When a bet pays off, does that success make you more confident to take on bigger risks? Were any of your other ventures as risky as that first one?

The [financial] risk of SecureIT was, like, 1,000 times more than the risk of Zscaler. The amount I invested in Zscaler was a small fraction of my net worth.

But Zscaler was much harder. I put more money in it than all the others combined. I took bigger bets. I hired people more quickly to solve some very hard problems. I wanted to do something big, something lasting.

We were trying to solve a problem that was futuristic. Will it be successful or not? Will the market take off or not? That was all unknown.

So if you asked me the chances of success of Zscaler, there was a much higher risk. Because, with SecureIT, it was fairly obvious that as you connect to the internet, you need firewalls.

What’s your best advice for someone who’s thinking about quitting their job to start their own business?

First, build conviction by learning more about what you want to do. Don’t just do some of the cursory work.

Second, start by putting in your own money. That actually is part of testing your conviction. If you really have conviction, you’ll take a chance on yourself. That also means you’ve done some serious homework, you’re ready, you’re committed.

You can also make decisions the way you want to make decisions. If Zscaler was largely owned by VCs, they probably could have shut it down. It took us a few years to really start getting traction in the market, and VCs can write you off and move on. They say, “It’s one of my 20 investments.”

When you put in your own money, this is the only business you have.

Gold jumped to a record Tuesday as rising expectations of a September interest rate cut bolstered demand for bullion.

Gold futures advanced 1.7% to $2,471.1, topping the previous high of $2,454.20 reached May 20.

Spot gold jumped 1.8% to $2,465.95 during the session, which is an all-time high according to LSEG data going back to 1968 that has not been adjusted for inflation.

Gold prices hit all-time highs earlier this year before pulling back as the prospect of higher-for-longer interest rates dampened investor enthusiasm for the precious metal. But interest in the asset has grown after June’s softer inflation data and some recently dovish comments from Federal Reserve Chair Jerome Powell combined to raise the odds of rate cuts coming this year. Markets are pricing in 100% odds of a rate cut in September now, according to futures trading tracked by the CME FedWatch tool.

A weakening dollar has also supported demand for bullion. On Tuesday, the U.S. greenback rebounded after falling to a five-week low.

“Interest to ‘buy-the-dip’ remained prevalent among investors amid strong sentiment towards gold, which is likely why the market was quick to rally on soft U.S. data prints and dovish Fed expectations,” UBS’ strategist Joni Teves said in a note on Friday.

“With the market sitting just above the psychological $2400 level, we think risks are skewed to the upside,” Teves continued. “We think positioning remains lean and there’s space for investors to build gold exposure.”

Gold rallied to record highs in the first half of 2024 on the back of a multi-year spike in demand from central banks around the world, as mounting global geopolitical risks boosted interest in the safe haven asset. According to UBS, central bank buying of bullion is the highest it’s been since the late 1960s.

“With some central banks now questioning the safety of holding USD- and EUR-denominated assets (following the financial and debt crises and more recently the war in Ukraine), many are choosing to instead fill their reserves with gold,” read a note last month from UBS.

Gold mining stocks also advanced on Tuesday. The VanEck Gold Miners ETF gained 3%, on pace for a fifth winning day in six. The U.S.-listed shares of Harmony Gold and Gold Fields rose 16% and 6%, respectively.

Federal Reserve Governor Christopher Waller on Wednesday suggested that interest rate cuts are ahead soon as long as there are no major surprises on inflation and employment.

“I believe current data are consistent with achieving a soft landing, and I will be looking for data over the next couple months to buttress this view,” Waller said in remarks for a program at the Kansas City Fed. “So, while I don’t believe we have reached our final destination, I do believe we are getting closer to the time when a cut in the policy rate is warranted.”

Keeping with statements from other policymakers, Waller’s sentiments point to an unlikelihood of a rate cut when the Federal Open Market Committee meets later this month, but a stronger likelihood of a move in September.

Central bankers have become more optimistic from data in recent months that has shown inflation easing after a surprisingly higher move for the first three months in 2024.

Waller outlined three potential scenarios in the days ahead: One, in which the inflation data turns even more positive and justifies a rate cut in “the not too distant future”; a second in which the data fluctuates but still points toward moderation; and a third in which inflation turns higher and forces the Fed into a tighter policy stance.

Of the three, he considers the third scenario of unexpectedly stronger inflation as the least likely.

“Given that I believe the first two scenarios have the highest probability of occurring, I believe the time to lower the policy rate is drawing closer,” Waller said.

Waller’s comments on Wednesday are of particular note because he has been among the more hawkish FOMC members this year, or those who have advocated for tighter monetary policy as fears escalated that inflation is proving more durable than expected.

In May, Waller told CNBC that he expected cuts to be “several months away” as he awaited more convincing data that inflation was receding. His speech Wednesday indicated that the threshold is close to being met.

For one, he said the labor market “is in a sweet spot” in which payrolls are expanding while wage gains are cooling. At the same time, the consumer price index declined 0.1% in June, while the 3.3% annual rate for core prices was the lowest since April 2021.

“After disappointing data to begin 2024, we now have a couple of months of data that I view as being more consistent with the steady progress we saw last year in reducing inflation, and also consistent with the FOMC’s price stability goal,” he said. “The evidence is mounting that the first quarter inflation data may have been an aberration and that the effects of tighter monetary policy have corralled high inflation.”

The comments also are consistent with what New York Fed President John Williams told The Wall Street Journal in an interview published Wednesday. Williams noted that inflation data is “all moving in the right direction and doing that pretty consistently” and is “getting us closer to a disinflationary trend that we’re looking for.”

Markets again are pricing in a more accommodative Fed.

Traders in the fed funds futures market are pricing in an initial quarter percentage point rate cut in September followed by at least one more before the end of the year, according to the CME Group’s FedWatch measure.

Fed funds futures contracts currently are implying a 4.62% rate at the end of the year, about 0.6 percentage point below the current level.