Wall Street Rides Higher as Fed Rate Cut Hopes Grow
Wall Street’s momentum just doesn’t seem to be slowing down, and today’s trading session added even more fuel to the rally. Markets in New York extended their record-setting run, with the Dow Jones Industrial Average climbing by more than 500 points at one stage, the S&P 500 pushing toward its third straight all-time high, and the Nasdaq also joining in the upward move. It’s been described as a market lifted on expectation, and those expectations are firmly centered on the U.S. Federal Reserve.
Investors are watching every bit of data with one question in mind: will the Fed cut interest rates next week? Thursday’s batch of economic reports seemed to keep that door wide open. Treasury yields slipped in the bond market, signaling confidence that borrowing costs may soon be reduced. While inflation numbers showed consumer prices rising at a 2.9 percent annual pace in August—slightly hotter than July and still above the Fed’s 2 percent target—markets appeared more focused on weakness in the job market.
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Unemployment claims ticked higher last week, suggesting layoffs are increasing. For Wall Street, this is a delicate balancing act. A softer labor market is seen as enough reason for the Fed to step in with rate cuts, which can stimulate the economy and push stock prices higher. But the risk of going too far remains—if hiring slows too much, it could tip the economy toward recession. For now, traders seem confident that the Fed will act, and that optimism has been powering stocks higher.
Individual companies added their own sparks to the rally. Health care firm Centene surged over 12 percent after reaffirming its profit outlook, while Opendoor Technologies soared more than 50 percent on news of a new CEO and fresh investment from company founders. Kroger reported stronger-than-expected profits, though its stock wavered, and Oracle cooled off slightly after a historic jump the previous day tied to artificial intelligence contracts.
Globally, the positive mood spread. European indexes moved higher after the European Central Bank left rates unchanged, signaling patience after earlier cuts. In Asia, Shanghai’s market jumped strongly, though Hong Kong lagged behind. Canada’s TSX also notched a fresh record as investors there bet the Bank of Canada will follow the Fed with its own cuts, given that inflation pressures north of the border remain muted.
For now, markets are moving with confidence, fueled by the belief that rate relief is just around the corner. Whether that confidence proves well-placed will be seen when the Fed meets next week.
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