Federal Reserve Rate Cut Speculations Fuel Wall Street Rally

Wall Street continued its upward trajectory as economic data suggested the Federal Reserve might cut rates again in December. All major stock indexes ended positively, despite tech sector challenges. Economic data hinted at a rate cut, supported by statements from Fed officials. Consumer confidence and retail sales data were mixed.

Wall Street extended its rally on Tuesday, fueled by economic indicators supporting a potential third and final interest rate cut by the U.S. Federal Reserve in December. While the Dow Jones led the gains among the major U.S. stock indexes, soft performance in the tech sector, particularly Nvidia, limited the Nasdaq's rise.

An influx of economic data highlighted a potential interest rate cut as early predictions suggest the Federal Open Market Committee might reduce the Fed funds target rate by 25 basis points. However, government shutdown delays rendered some reports outdated. Retail sales and producer price reports showed weakened spending and cooled inflation, aligning with the need for monetary easing.

Financial markets, backed by statements from Federal Reserve officials, currently forecast an 84.7% chance of a December rate cut. Concurrently, speculation looms over potential successors to Fed Chair Jerome Powell, with market sentiment buoyed by potential dovish leadership ensuring a downward trend in interest rates till 2026.

(With inputs from agencies.)