Zacks Equity Research
3 min read
U.S. stock markets closed higher on Wednesday, maintaining the rally for four consecutive days. Market participants remained hopeful of another possible interest rate cut next month. Strong economic data boosted investors’ sentiments. All three major stock indexes ended in positive territory.
The Dow Jones Industrial Average (DJI) advanced 0.7% or 314.67 points to close at 47,427.12. Notably, 21 components of the 30-stock index ended in positive territory, while nine finished in negative territory.
The tech-heavy Nasdaq Composite finished at 23,214.69, rising 0.8% or 189.01 points on the strong performance of artificial intelligence bigwigs. The major gainer of the tech-laden index was AppLovin Corp. APP. The stock price of this AI-powered technology services giant surged 5.5%. %. AppLovin currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The S&P 500 gained 0.7% points to finish at 6,812.61. 10 out of 11 broad-sectors of the broad-market index ended in positive territory while one ended in negative territory. The Materials Select Sector SPDR (XLB), the technology Select Sector SPDR (XLK), the Utilities Select Sector SPDR (XLU) and the Consumer Staples Select SPDR (XLP), increased 1.2%, 1.3%, 1.3% and 1%, respectively.
The fear gauge, the CBOE Volatility Index (VIX) was down 7.4% to 17.19. A total of 14.78 billion shares were traded on Wednesday, lower than the last 20-session average of 19.49 billion. Advancers outnumbered decliners on the NYSE by a 3.37-to-1 ratio. On the Nasdaq, a 2.13-to-1 ratio favored advancing issues.
On Nov. 25, Bloomberg reported that White House National Economic Council Director Kevin Hassett has emerged as a key contender for the next Fed Chairman. CNBC reported citing Treasury Secretary Scott Bessent that chances are very high that President Trump will announce the name of the next Fed Chair before Christmas.
Hasset is known for his strong view of a low-interest-rate regime. Bank of America economist Aditya Bhave believes that the Fed fund rate could be lowered as low as below 3% if Hasset becomes the next Fed Chairman. On Nov. 24, San Francisco Federal Reserve President Mary Daly and on Nov. 21, New York Federal Reserve President John Williams supported the rate cut in December citing weak labor market conditions.
Following these developments, the CME FedWatch interest rate derivative tool currently shows an 85% probability of a 25-basis-point rate cut in December. This probability was as low as 42% last week.
