Wall Street Hits Record Highs Amid Rate Cut Optimism and Federal Shutdown
Wall Street's main indexes reached record highs amid investor optimism about potential interest-rate cuts, despite disruptions from a federal government shutdown. The anticipation of rate cuts was fueled by signs of a softening labor market and a strong technology sector performance.
Investor optimism drove Wall Street's main indexes to intraday record highs on Friday, as hopes for an imminent interest-rate cut by the Federal Reserve bolstered market sentiment. This comes in a week characterized by volatility due to the U.S. government shutdown, which disrupted the flow of critical economic data.
Despite the postponement of the nonfarm payrolls report, investors clung to other labor market indicators suggesting the possibility of rate cuts. Meanwhile, the technology sector's strength helped sustain investor confidence, overshadowing the ongoing federal impasse.
Healthcare stocks saw a 1.3% gain, led by top performers Humana and Danaher. However, the S&P 500's communication services sector experienced losses, with Meta Platforms and Alphabet dragging it down. BofA Global Research anticipates the Fed will cut rates by October, although some officials expressed caution regarding the timing and extent of potential rate adjustments.
(With inputs from agencies.)
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