US stocks closed higher following increased expectations that the Federal Reserve (Fed) will cut the target funds rate in December.
This rise was also supported by the strength of the ‘Magnificent Seven’ stocks, which drove the Nasdaq index to its highest level.
This situation helped investors reduce concerns about high valuations in the technology sector.
The Dow Jones index rose 0.44% to 46,448.27 points, the S&P 500 surged 1.55% to 6,705.12 points, while the tech-focused Nasdaq increased 2.69% to 22,872.01 points.
Economic reports delayed due to the US government shutdown showed a weak labor market and persistent high inflation, further strengthening expectations that the Fed will cut interest rates at the December meeting.
Dovish comments from Fed Governor Christopher Waller, New York Fed President John Williams, and San Francisco Fed President Mary Daly provided some support for this confidence, although other policymakers expressed differing views.
According to CME FedWatch, financial markets now expect an 85% chance of a rate cut, up from 42.4% last week.
Attention now shifts to the release of key economic data this week including the Producer Price Index (PPI), retail sales, and durable goods orders, as well as independent indicators such as the Case-Shiller home price index, consumer confidence, and pending home sales.
Trading volume on US exchanges was valued at $18.32 billion, compared to an average of $19.94 billion over the past 20 trading days.
Be First to Comment