- U.S. stocks surged on Monday as traders priced in improving prospects for a Federal Reserve interest rate cut.
- Major stock indexes rose, with the S&P 500 hitting an all-time high.
- Investors expect two rate cuts in 2024, according to the CME FedWatch tool.
U.S. stocks rose on Wednesday, with the S&P 500 and Nasdaq Composite closing at fresh record highs, as traders grew bullish on interest rate cuts and cheered Nvidia’s rise in share price making it the world’s second-most valuable company.
A cooling labor market has spurred expectations of interest-rate cuts, giving the Federal Reserve more room to ease monetary policy. The private sector added 152,000 jobs last month, below the 175,000 that economists had expected, according to ADP data.
“Investors are viewing the slowing economic data as a ‘Goldilocks’ signal, raising hopes of a Fed rate cut,” Mark Hackett, head of investment research at Nationwide, said in a statement Wednesday. “The stock market’s slow but steady rise continues to confound the bears.”
Nvidia surged on Thursday, leading the tech sector rally. The chipmaker’s shares rose 5% to close at $1,224.40, a record high.
The company’s stock price has soared recently, making it the world’s second-largest company after Apple, and it is now second only to Microsoft in market capitalization.
The next data point investors will be watching is when the Bureau of Labor Statistics releases nonfarm payrolls for May on Friday. Economists expect payrolls to have increased by 1.75 million in May, roughly equal to April’s figure.
As of the close of trading at 4pm on Wednesday, U.S. stock indexes were as follows:
What else is happening today:
Commodities, Bonds and Cryptocurrencies:
- West Texas Intermediate crude rose 1.3% to $74.20 a barrel, while the international benchmark Brent crude rose 1.3% to $78.53 a barrel.
- Gold rose 1.17% to $2,355.29 per ounce.
- The yield on the 10-year Treasury note fell 5 basis points to 4.283%.
- Bitcoin rose 0.63% to $71,074.
