Traders work on the trading floor of the New York Stock Exchange.
Brendan McDermid | Reuters
this S&P 500 Index The Fed hit a record high on Tuesday as markets awaited a key rate cut decision from the Federal Reserve.
The broader index was last up 0.3% at 5,650 points, having previously hit a new record high of 5,670.81 points. this Nasdaq Index up 0.6%, Dow Jones Industrial Average Up 75 points, or 0.2%. The 30 stocks in the Dow Jones Index also hit all-time highs.
S&P 500 Index 2024
The S&P 500’s record high comes at a time when markets are facing historically difficult times. September was the benchmark index’s worst month in the past 10 years, with an average monthly decline of 1.3%, according to FactSet data.
Traders also overcame headwinds stemming from late summer concerns about the health of the U.S. economy. Disappointing employment and manufacturing data for August triggered a sharp one-day sell-off. However, stocks were able to rebound on the back of more constructive data releases and expectations of a rate cut from the Federal Reserve.
Wall Street is awaiting a long-awaited rate cut from the Federal Reserve on Wednesday afternoon, a move that could help boost corporate profits amid high borrowing costs and high inflation. The Federal Reserve began aggressive interest rate hikes for the first time in March 2022.
The latest retail sales data shows consumers are in good health. According to data from Dow Jones, retail sales rose 0.1% in August, while economists expected a 0.2% decline. Excluding autos, the number also rose 0.1%, just below the consensus forecast of 0.2%.
While investors expect a rate cut on Wednesday, markets are divided over the size of a potential cut. Traders now see a 59% chance of a 50 basis point rate cut from the central bank, according to CME Group’s FedWatch tool. That’s up from about 47% on Friday but slightly lower than the 67% predicted earlier on Tuesday. 1 basis point equals 0.01%.
Some investors said a deeper rate cut could raise concerns about the health of the economy.
“A 50-basis-point rate cut could further signal a downgrade in the Fed’s view on the labor market — which would be a more concerning sign,” said Adam Turnquist, chief technical strategist at LPL Financial. “I think market expectations are consistent with the Fed’s outlook for the labor market.” There will be considerable deviations between forecasts.”
Microsoft The company’s shares rose 1.3% after the technology giant raised its quarterly dividend 10.7% to 83 cents per share. The company also approved a $60 billion buyback program. Intel stock Increased by more than 5% The company said it plans to Incorporate its foundry business into a subsidiary. The Biden administration also Granted to the company Provide up to $3 billion in funding through the CHANGING CHANGES Act.
