Title: Wall Street Keeps High Hopes On U.S Economy and Lower Interest Rates
Investing.com reveals that on Thursday evening, U.S. stock index futures experienced a rise in thin trading, maintaining Wall Street’s proximity to record highs. This increase is due to the positive outlook on the robust U.S. economy and potentially reduced interest rates.
The growing optimism around U.S. trade tariffs on China being less severe than initially feared also contributed to improved market sentiments. Investors are now predicting a less catastrophic trade dispute between the world’s largest economies.
The majority of investors are banking on the Federal Reserve further reducing interest rates in December, despite the uncertain future. Long-term prospects remain unclear due to persistent inflation and the potential for growth policies under the incoming administration of President-elect Donald Trump.
Despite escalating tensions between Russia and Ukraine, and reciprocal accusations of ceasefire violations between Israel and Hezbollah, the markets remained undeterred.
The Wall Street indices experienced minor drawdowns in recent times, particularly as tech stocks faced a beating from weak earnings reports and heightened regulatory scrutiny.
However, investments in economic-sensitive sectors have helped to keep the U.S. stock benchmarks close to record highs. This trend is also supported by investors’ anticipation for more growth-oriented policies under the Trump administration.
The Dow, S&P, and Nasdaq have all seen an upward trend in November, with increases ranging between 5% and 7%. This surge came following a series of record highs post-Trump’s election victory, with the Dow leading the pack.
Looking ahead, the market’s attention will be centered on incoming comments from various Federal Reserve officials, including Chair Jerome Powell. These insights will provide further direction on interest rates.
Despite recent indicators of stubborn inflation and a robust labor market, expectations for a 25 basis point reduction in December persist. However, central bank officials have recently expressed a more cautious outlook on rates, which has raised concerns about a potential slowdown in rate cuts by 2025.
The Federal Reserve will hold its final meeting for the year on December 17 and 18.
