Wall Street Rallies: Fed's Potential Rate Cuts Spark Optimism

Wall Street celebrated a robust rally on Monday, buoyed by the anticipation of U.S. Federal Reserve interest rate cuts as early as July counteracting concerns regarding Iranian disruptions to crude transport in the Middle East.

All three major U.S. stock indexes experienced gains, with consumer discretionary stocks leading the upward movement, notably propelled by Tesla's surge following the launch of its robotaxi service in Austin, Texas. Commenting on the rally, Jay Hatfield, CEO at InfraCap, acknowledged the unexpected boost, citing reduced geopolitical uncertainty.

Market analysts expect at least two 25-basis-point rate cuts before the year's end, with the first anticipated in September. This sentiment has shifted despite Fed Chair Jerome Powell's cautious approach of 'wait and see.' Meanwhile, oil prices dipped despite tensions in the Middle East, as Iran's retaliation didn't include disrupting the Strait of Hormuz.

(With inputs from agencies.)