Nasdaq Hits Record High: Investors Anticipate Fed's Rate Cut Decision

The Nasdaq reached a record high as investors anticipated the Federal Reserve's interest rate decision, with a rate cut almost fully expected. The market's growth was fueled by optimism over AI-related companies, economic resilience, and potential pro-business policies. Growth stocks, including Alphabet and Tesla, led sector gains.

On Monday, the Nasdaq closed at a record high, with the S&P 500 also rising, as investors focused on upcoming economic data and the Federal Reserve's policy decision. The market largely anticipates a 25 basis point rate cut this week.

Sam Stovall of CFRA Research indicated that while the rate cut is expected, the Fed's guidance will be crucial, suggesting possible fewer cuts next year. The economic backdrop is mixed; the S&P Global reported a drop in manufacturing PMI, hitting a low since May 2020.

Growth stocks like Alphabet and Tesla saw significant gains, boosting related sectors ahead of the Fed's decision. The S&P 500 has surged over 27% this year, driven by AI optimism and a robust economy. Meanwhile, U.S. exchanges recorded trading volumes of 15.33 billion shares.

(With inputs from agencies.)