Wall Street Rally Fueled by Fed Rate Cut Hopes

Wall Street stocks climbed higher, spurred by expectations of a December Fed rate cut amid signs of labor market weakness and stubborn inflation. Major indexes, particularly tech stocks, saw gains as optimistic investors anticipated the Fed's potential monetary easing at the year's end.

Wall Street stocks closed higher on Monday, buoyed by increasing optimism that the Federal Reserve will cut interest rates in December. This comes despite ongoing concerns about high tech valuations, with major U.S. indexes starting the holiday-shortened week with substantial gains.

Recent economic reports, delayed due to a six-week government shutdown, suggest labor market fragility and persistent inflation, fueling hopes for a rate cut. Fed officials like Christopher Waller and John Williams supported this possibility, though not all policymakers agree.

Financial markets currently predict an 85% chance of a December rate cut. Retail sales data and other economic indicators are expected this week, influencing market trends as the third-quarter earnings season wraps up, showing significant growth in reported earnings.

(With inputs from agencies.)