Wall Street extends rally as rate-cut bets strengthen
Business
Wall Street extends rally as rate-cut bets strengthen
(Reuters) - Wall Street's main indexes kicked off the last week of the year on a positive note on Tuesday as growing bets of early rate cuts by the Federal Reserve lifted investor sentiment after Christmas holidays.
Signs of cooling inflation have bolstered expectations of a dovish policy pivot by the Fed next year, pushing the benchmark S&P 500 index (.SPX) close to its record closing high touched in January 2022.
A close above that level will confirm the benchmark index has been on a bull run since bottoming out in October 2022.
U.S. stocks ended higher on Friday after the Commerce Department's Personal Consumption Expenditures (PCE) report showed inflation continues to meander down toward the Fed's average annual 2% target.
The three main indexes also logged their eighth consecutive weekly gains on Friday following the report, the longest winning streak for the S&P 500 (.SPX) since late 2017.
"Everyone is still enjoying the fruits of last week's rally and (expectations of) significantly lower move in interest rates," said Michael James, managing director of equity trading at Wedbush Securities.
Traders' bets that the central bank will deliver a rate cut of at least 25 basis points in March 2024 stood at about 83%, compared with about 21% in November, according to the CME Group's FedWatch tool.
