Major U.S. Stocks Rebound on Heightened Fed Rate Cut Odds, Strong Economic Data

The Dow, Nasdaq, and S&P 500 advanced on renewed optimism for a December Federal Reserve rate cut, supported by better-than-expected durable goods orders and lower jobless claims

The Dow climbed 314.67 points (0.7%) to 47,427.12, the Nasdaq jumped 189.10 points (0.8%) to 23,214.69 and the S&P 500 advanced 46.73 points (0.7%) to 6,812.61.

Stocks extended their rebound as traders focused on rising odds of another Federal Reserve rate cut and stronger-than-expected U.S. economic data, lifting major averages from their recent pullback.

Renewed optimism about interest rates followed dovish remarks from Fed officials and the CME Group FedWatch Tools indication that the probability of a quarter-point cut next month has jumped to about 83% from roughly 30% a week earlier. At the same time, September durable goods orders beat expectations, rising 0.5% after a revised 3.0% gain in August while initial jobless claims unexpectedly fell to 216,000, the lowest since mid-April, underscoring a still-resilient labor market even as markets price in easier policy.

Gold stocks moved sharply higher amid an increase by the price of the precious metal, driving the NYSE Arca Gold Bugs Index up by 4.9% to its best closing level in well over a month. Computer hardware and semiconductor stocks witnessed significant strength on the day, contributing to the continued advance by the tech-heavy Nasdaq. Airline stocks was substantially strong, with the NYSE Arca Airline Index soaring by 3.2% to a one-month closing high. Brokerage, steel and natural gas stocks strong upward move, moving higher along with most of the other major sectors.

Asia-Pacific stocks moved mostly higher. Japan's Nikkei 225 Index shot up by 1.9% and South Korea's Kospi surged by 2.7%, although China's Shanghai Composite Index bucked the uptrend and dipped by 0.2%. The major European markets also moved to the upside on the day while the German DAX Index jumped by 1.1%, the U.K.'s FTSE 100 Index and the French CAC 40 Index both advance by 0.9%.

In the bond market, treasuries recovered from an early pullback to end the day roughly flat. Subsequently, the yield on the benchmark ten-year note which moves opposite of its price, edged down by less than a basis point to 3.99%, closing below 4% for the first time since late October.

Powered by Capital Market - Live News