Traders at the New York Stock Exchange saw an exciting day on Monday. Major U.S. stock markets made gains, fueled by optimism in the artificial intelligence sector and hopes for a possible interest rate cut by the Federal Reserve.
Futures for the Dow Jones Industrial Average rose slightly, while the S&P 500 and Nasdaq 100 also saw small increases. This positive momentum came after a strong day of trading, where the S&P 500 jumped nearly 1.6% and the Nasdaq Composite soared 2.7%. This was the best day for the Nasdaq since May 12.
One of the standout performers was Alphabet, the parent company of Google, which climbed 6.3%. Meanwhile, Broadcom surged over 11%, becoming the biggest gainer in the S&P 500. Both companies are vital players in the tech space, particularly in high-performance chips for AI applications. NVIDIA, another major company in this sphere, saw a gain of around 2% after a rough month where shares dipped by 10%.
Despite the recoveries, all three major indexes are tracking for a losing month. The S&P 500 is down about 2%, while the Nasdaq is down 3.6%. The Dow has lost around 2.3% this month.
Abby Yoder, a U.S. equity strategist at JPMorgan Private Bank, noted on CNBC that there has been a recent pullback in the market. She pointed out that although AI stocks have been driving gains this year, investors are starting to scrutinize tech valuations more closely. She believes that while the fundamentals of AI-related investments remain strong, the market might experience a more selective approach.
Additionally, traders are keenly awaiting news that could influence future Federal Reserve decisions on interest rates. Current estimates show there’s an over 80% chance of a quarter-point cut in December. This speculation gained traction after New York Fed President John Williams mentioned the possibility of lowering rates soon. Similarly, San Francisco Fed President Mary Daly has expressed support for a rate cut, citing concerns about the labor market.
As Thanksgiving approaches, the stock market will close on Thursday and have an early closure on Friday at 1 p.m. ET.
For further insights on interest rates and market movements, you can explore the CME FedWatch Tool for up-to-date information on Fed projections.
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