The S&P 500 nudged higher on Wednesday, buoyed by optimism after the Federal Reserve’s July meeting minutes signaled a likely rate cut in September.
The broad index rose 0.42% to 4,620.85, marking its ninth win in ten sessions.
This latest push has brought the S&P 500 within a whisker—just 1%—of its all-time high.
Four of the eleven sectors hit 52-week peaks, underscoring the market’s strength.
Meanwhile, the Nasdaq Composite gained 0.57%, ending at 13,918.99, echoing the S&P’s positive streak.
The Dow Jones Industrial Average inched up by 55.52 points, or 0.14%, to close at 34,890.49, notching its sixth win in seven days.
Small caps outshone the broader market, with the Russell 2000 index surging over 1%, reflecting renewed investor confidence in the more volatile segment of the market.
The optimism stemmed from the Fed’s minutes, which suggested that a September rate cut is on the cards if economic data aligns with expectations.
This reinforced Wall Street’s hopes, with traders now betting on a 100% chance of a rate cut next month, according to the CME Group’s FedWatch Tool.
However, the extent of the reduction remains a topic of debate.
Wednesday’s gains followed a slight dip in the S&P 500 and Nasdaq Composite, which had just broken their longest winning streaks since late 2023.
The market’s recent volatility was sparked by a weak U.S. jobs report and a surprise rate hike from the Bank of Japan, leading to a global sell-off on August 5.
However, equities bounced back, fueled by robust retail sales and lower-than-expected inflation, easing fears of an impending recession.
Now, all eyes are on Federal Reserve Chair Jerome Powell, who is set to speak at the Jackson Hole Economic Symposium on Friday.
His remarks could offer crucial insights into the Fed’s next move in September.
Everyone’s watching the Fed’s next steps, noted Chris Zaccarelli, CIO at the Independence Advisor Alliance.
The market seems to have shifted from growth concerns back to focusing on the Fed’s potential rate-cutting cycle.
In the business arena, Target saw a double-digit surge, climbing over 11% after beating Wall Street’s forecasts for its fiscal second quarter.
Conversely, Macy’s took a hit, dropping nearly 13% following a downward revision of its full-year sales outlook.
As the market navigates through these economic currents, investors remain vigilant, awaiting any signs that could tip the scales in the weeks ahead.
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