Markets Surge Amid Fed Speculation and Megacap Gains
The S&P 500 and Nasdaq hit record highs due to gains in megacap companies and investor confidence in Federal Reserve's potential easing monetary policy. A 25 basis point rate cut is anticipated as job market weakness persists. Consumer discretionary stocks, including Amazon and Tesla, led sector gains.
On Wednesday, the S&P 500 and Nasdaq surged to record-breaking levels following strong performances from megacap companies. Investors are increasingly hopeful that the Federal Reserve might ease its monetary policy next month.
Despite rising underlying price pressures, investors took solace in the fact that U.S. tariffs had not significantly affected consumer prices. This development, coupled with job market weaknesses and a Federal Reserve shake-up, has traders expecting a dovish move from the bank. The CME's FedWatch Tool indicates a full pricing of a 25 basis points rate cut, a sentiment supported by Thomas Hayes of Great Hill Capital LLC.
The Dow Jones and Russell 2000 saw significant gains as well, with sectors like consumer discretionary leading the charge. On the geopolitical front, a virtual meeting on the Russo-Ukraine situation is planned between Donald Trump and European leaders. Meanwhile, Nvidia-backed CoreWeave reported a disappointing quarter, affecting its stock performance.
(With inputs from agencies.)
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