Wall Street extended its rally on Wednesday as revived tech strength and the increasing probability of a December interest rate cut from the Federal Reserve put investors in a buying mood the day before the Thanksgiving holiday
The Dow Jones Industrial Average surged 314.67 points, or 0.8%, to 47,427.12. The tech-heavy Nasdaq climbed nearly 200 points, or 0.8%, and the S&P 500 gained 0.7%.
All three major stock indexes notched their fourth consecutive daily gains, as investors looked past the worries over inflated tech valuations that dragged all three indexes to losses last week.
Those fears ebbed in the aftermath of artificial intelligence doyen Nvidia’s upbeat quarterly results and forward guidance, and were eased further by AI server maker Dell Technologies’ consensus-beating fourth-quarter revenue forecast.
“Nvidia … put some of the short-term fears to rest,” said Matthew Keator, managing partner in the Keator Group, a wealth management firm in Lenox, Massachusetts. “Since then we’ve seen some dovish comments from the Fed, particularly the New York Fed governor, which I think are signaling a potential cut next month, and I think that that’s what’s been driving the markets lately.”
A poll conducted by Reuters showed that, on average, analysts expect the S&P 500 to rise by 12% between now and year-end 2026, powered by a robust economy, continued tech sector strength and an accommodative Fed.
The Fed’s Beige Book, which summarizes economic activity conditions by district, appeared to have little to no effect on rate cut expectations.
Financial markets are currently pricing in a likelihood of 84.9% that the central bank will implement a 25-basis-point reduction to its key Fed funds target rate at the conclusion of its December policy meeting, according to CME’s FedWatch tool.
Airlines were sharply higher on what is traditionally the busiest travel day of the year for commercial carriers.
Air traffic is often viewed as a barometer of consumer health, which bodes well heading into the holiday shopping season, which kicks off on Thanksgiving and is followed by Black Friday and Cyber Monday. The period is crucial for U.S. retailers as they court shoppers and navigate tariff-squeezed profit margins and a wave of corporate layoffs.
Even so, while the National Retail Federation forecasts 2025 holiday sales to surpass $1 trillion for the first time, forecasts from discount retailers such as Walmart and Target have been mixed.
Economic data showed consensus-topping core capital goods orders in September, and while the report from the Commerce Department is stale due to government shutdown delays, it suggests corporate expenditures are more robust than economists predicted.
On the other hand, while initial claims for unemployment insurance landed below consensus, ongoing claims remain on an upward trend, supporting recent survey data showing consumers’ assessment of the labor market is deteriorating.
Dell Technologies jumped 5.8% in the wake of its better-than-expected earnings and upbeat forecast
Human resources software firm Workday slid 7.9% after the company reported third-quarter subscription revenue in line with estimates.
Deere’s weaker-than-expected annual profit forecast, weighed down by tariff effects, sent the heavy machinery maker’s shares down 5.7%.
