Home / Business and Economy / Fed Rate Cut Hopes Spark Market Rally
Fed Rate Cut Hopes Spark Market Rally
26 Nov
Summary
- Dow Jones Industrial Average surged 664 points on Tuesday.
- Markets now price in an 83% chance of a December rate cut.
- Alphabet stock hit new highs on AI chip demand reports.
The Dow Jones Industrial Average experienced a significant surge of 664 points on Tuesday, extending its winning streak to three days. This market rally was primarily driven by investor focus shifting towards the Federal Reserve's potential December interest rate decision. Expectations for a rate cut have intensified, with markets now pricing in an approximately 83% probability of a quarter-point reduction.
This heightened anticipation stems from reports suggesting a potential Federal Reserve chair candidate who favors lower rates, alongside comments from New York Fed President John Williams indicating room for rate reductions in the near term. These developments have dramatically shifted market sentiment over recent days.
In sector-specific news, Alphabet shares climbed to new record highs, reportedly due to Meta Platforms considering substantial investments in Alphabet's AI chips. Conversely, Nvidia's stock saw a decline as investors assessed potential impacts on its dominant position in the AI semiconductor market.
