Market Surge Fueled by Prospects of Fed Rate Cut

Wall Street advanced as economic data bolstered expectations for a Federal Reserve rate cut in December. Despite tech sector weakness, major stock indexes showed gains. Consumer confidence fell sharply, influencing markets' positive outlook on interest rate reduction.

Wall Street saw gains on Tuesday as economic data reinforced the possibility of a third Federal Reserve rate cut this year slated for December. The day ended with all major U.S. stock indexes on a high, notably the blue-chip Dow. However, Nvidia's slump limited Nasdaq's progress.

Nvidia shares fell 3.9%, impacting the Nasdaq's performance, alongside the Philadelphia SE Semiconductor index which was down 0.8%. The recently released economic data, although delayed due to a prolonged government shutdown, have led analysts to anticipate a 25 basis point cut in the Fed's key interest rate at the next policy meeting.

Reports from the Commerce and Labor departments indicated a cooling in both spending and inflation for September. Economist Peter Cardillo of Spartan Capital Securities highlights that while the data is dated, it supports a December rate cut. Financial markets appear to align with this sentiment, pricing in an 84.7% likelihood of the rate cut following supportive comments from key Fed officials.

(With inputs from agencies.)