NEW YORK: Wall Street’s main indexes rose on Monday, on the back of gains from tech stocks and mega-caps such as Alphabet, as growing bets on a Federal Reserve rate cut in December fueled risk-taking.
Dovish remarks from influential Fed Governor Christopher Waller and New York Fed President John Williams offered some respite on the policy front and stalled a month-long recent selloff in US stocks.
But other policymakers have voiced caution, reflecting division within the central bank ahead of December’s FOMC meeting.
Still, investors are pricing in a 76.9 percent chance the Fed will deliver a 25-basis-point interest rate cut next month, compared with 42 percent a week earlier, according to CME Group’s FedWatch Tool.
Mega-cap stocks were in the lead, with Alphabet up 4.6 percent and Tesla gaining 6.7 percent, while Broadcom jumped 10 percent.
Communication Services led gains among the 11 S&P 500 sectors with a 3 percent rise, while an index tracking chip companies advanced 4.3 percent.
“It’s a combination of rate-cut enthusiasm, which has completely turned around since Williams made his comments on Friday morning, and the usual fear of missing out,” said Steve Sosnick, chief market analyst at Interactive Brokers.
At 11:40 a.m. ET, the Dow Jones Industrial Average rose 249.13 points, or 0.54 percent, to 46,494.54, the S&P 500 gained 87.81 points, or 1.33 percent, to 6,690.80 and the Nasdaq Composite gained 503.65 points, or 2.26 percent, to 22,776.74.
Monday’s gains were a relief for Wall Street, having hit a volatile patch in November as investors worried the AI boom may be morphing into a bubble, while a prolonged US government shutdown starved them of data to help gauge the health of the world’s largest economy.
The S&P 500 and Nasdaq are headed for monthly losses in November, and are on track for their steepest declines since fears of a tariff hike sparked a selloff in March. Analysts broadly flagged periods of volatility could still flare up.
Deutsche Bank expects the S&P 500 to hit 8,000 by the end of 2026, citing resilient corporate earnings and AI-driven gains.
September retail sales and producer prices data are expected this week, ahead of the holiday shopping season that starts with the Thanksgiving holiday on Thursday, extending into Black Friday and Cyber Monday.
Spending trends are coming under sharper scrutiny as a flurry of layoff announcements, rising unemployment data and US tariffs cloud consumer sentiment. Even so, the National Retail Federation expects holiday sales to top USD1 trillion for the first time.
“The consumer sentiment numbers are still lousy. But it’s telling us the consumer is nervous but still somewhat resilient,” Sosnick said.
Meanwhile, Bristol-Myers gained 4.9 percent after European rival Bayer unveiled positive late-stage data for its cardiovascular drug.
Some US health insurers and hospital operators gained after a report said Trump’s health plan could see subsidy extensions for two years.
Centene rose 7.5 percent, while Oscar health surged 20 percent.
Advancing issues outnumbered decliners by a 1.96-to-1 ratio on the NYSE and by a 2.18-to-1 ratio on the Nasdaq.
The S&P 500 posted 17 new 52-week highs and two new lows while the Nasdaq Composite recorded 87 new highs and 88 new lows.
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