Wall Street’s main indexes rose for a fourth consecutive session on Wednesday, as investors parsed fresh economic data and doubled down on bets the Federal Reserve will cut interest rates in December.
The Dow Jones Industrial Average surged 372 points, or 0.8%, to 47,484. The Nasdaq gained 214 points, or 0.9%, and the S&P 500 gained 0.8%.
Mega-cap stocks led gains across the board, pushing the S&P 500 and the Nasdaq to two-week highs, while the Dow was near its two-week peak.
All S&P 500 sub-sectors were in positive territory, barring communication services which was weighed down by a decline in Alphabet shares.
New claims for US jobless benefits fell to 216,000 in the week ended November 22, below expectations of 225,000, according to Labor Department data, while a delayed report showed core capital goods orders rising 0.5% in September, topping forecasts for a 0.3% gain.
“The economy isn’t slipping into recession, but it’s weak enough to allow the Fed another cut. There’s still a high amount of people that are on unemployment, so this gives the Fed headroom to be able to cut some more,” Kim Forrest, chief investment officer at Bokeh Capital Partners said.
On the back of softer consumer demand signals and dovish remarks from key Fed officials, traders are now pricing in an 84.9% chance of a 25-basis-point rate cut next month – nearly double last week’s odds, CME’s FedWatch tool showed.
Investors were also weighing a report suggesting White House economic adviser Kevin Hassett was a frontrunner to be the next Fed Chair, at a time when political influence in monetary policymaking has been a concern.
Wall Street’s recent recovery from a tech-led selloff earlier this month has trimmed monthly losses on the main indexes. It would still be their biggest monthly losses since the US tariff rout earlier this year.
Lifting some of the gloom on Wednesday was a 2.3% rise in Dell after its quarterly forecasts surpassed expectations, supported by strong demand for its servers in AI data centers.
Traders were also bracing for the busy holiday shopping period – Thanksgiving on Thursday, followed by Black Friday and Cyber Monday – a stretch when trading volumes typically thin out and price swings could sharpen.
The period will be pivotal for big-box retailers as they court shoppers squeezed by tariff-driven price increases and a wave of corporate layoffs.
Results and forecasts from retailers such as Walmart and Target have been mixed even as the National Retail Federation expects this year’s holiday sales to top $1 trillion for the first time.
Among other stocks, HP fell 2.3% after the personal computer maker unveiled dour profit forecasts and announced job cut plans.
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