Wall Street Rallies As Rate Cut Hopes, Ceasefire Boost Investor Confidence
Wall Street surged on June 26, with the S&P 500 and Nasdaq inching closer to record closing highs, fuelled by optimism over a potential US Federal Reserve (Fed) rate cut and easing geopolitical tensions in the Middle East.
All three major indexes posted strong gains in a broad-based rally. The Dow Jones Industrial Average rose 404.41 points, or 0.94%, to close at 43,386.84. The S&P 500 gained 0.80% to 6,141.02, while the Nasdaq Composite climbed 0.97% to 20,167.91.
The rally was underpinned by a continued ceasefire between Israel and Iran, which eased geopolitical risks, and a slew of economic data that reinforced expectations for a Fed rate cut later this year. Market bets now place a 75% chance of a rate reduction by September, according to CME's FedWatch tool.
Bank stocks led the charge, with the S&P 500 banks index jumping 1.6% after the Fed proposed easing leverage rules, potentially freeing up capital for major banks.
Fed officials offered dovish signals, with San Francisco Fed President Mary Daly citing a muted tariff impact and Boston Fed President Susan Collins leaning toward a rate cut amid economic uncertainty. Their comments followed Fed Chair Jerome Powell's testimony, in which he maintained a cautious stance on monetary policy.
Economic indicators painted a mixed picture. While the first quarter GDP was revised lower due to soft consumer spending and jobless claims hit multi-year highs, durable goods orders and pending home sales beat forecasts, helping buoy investor sentiment.
In sector performance, communication services outpaced all others, while real estate lagged. Micron fell 1% despite a strong revenue forecast, while copper's rally to a three-month high lifted miners Freeport-McMoRan and Southern Copper by 6.8% and 7.8%, respectively.
Market breadth was overwhelmingly positive: advancers outpaced decliners nearly five-to-one on the NYSE and more than two-to-one on the Nasdaq, signalling broad investor optimism.
With stocks hovering near all-time highs and Fed policy seemingly tilting dovish, all eyes now turn to upcoming economic data for further confirmation on the central bank's path forward. Related
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The Sun
2 hours ago
- The Sun
Trump's policy shifts fuel market uncertainty despite record highs
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The Star
6 hours ago
- The Star
Ringgit to trade firmer against US dollar next week, ahead of US labour data
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BusinessToday
9 hours ago
- BusinessToday
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