Overview
Today, the U.S. stock market saw an upward trend, driven by expectations of a Federal Reserve rate cut in December and advancements in AI technology. The S&P 500 index rose 1.5% to its best in six weeks, while the tech-heavy Nasdaq surged over 2%, marking its largest increase since May. Last week's concerns about high valuations of AI companies and uncertainties about the Federal Reserve's future actions were eased by statements from Fed officials. Christopher Waller, a Federal Reserve Governor, hinted at supporting a rate cut next month, which buoyed the market on Monday. Similarly, Mary Daly, the President of the San Francisco Federal Reserve, expressed her support for a potential cut in a separate interview. However, the U.S. government's shutdown caused delays in the release of key economic indicators, leaving the Fed without updated data. This has increased uncertainty about policy directions and has allowed for speculative trends. Currently, the market is reflecting a 70% probability of a rate cut in October, although recent disagreements among Fed officials and data gaps have kept the probability volatile.
| Nasdaq Composite | S&P 500 |
| Dow Jones Industrial Average | 1 South Korean won equals |
Major News Story
- Federal Reserve Rate Cut Indication: Comments from Christopher Waller and Mary Daly increased expectations for a rate cut.
- Google's AI Model Announcement: Google's announcement led to a rally in tech stocks and positively affected other AI stocks like Produccom and Micron.
- Economic Indicator Delays: A delay in economic indicators due to the U.S. government shutdown added to the Fed's struggles to update its data.
Tomorrow's Economic Indicators
| Time | Event Description |
| 22:30 | U.S. September PPI Data Release |
| 22:30 | U.S. September Retail Sales Release |
| 22:55 | U.S. Johnson Redbook Retail Sales |
| 23:00 | U.S. September Home Price Index Release |
| Midnight | U.S. August Business Inventories Release |
| Midnight | U.S. November Consumer Confidence Index Release |
| TBA | U.S. 5-Year Treasury Note Auction |
General Opinion
Market analysts are optimistic about a year-end rally, spurred by expectations of a Fed rate cut. UBS Trading Desk and Susquehanna's Chris Murphy predict continued upward market momentum. However, Richard Under of Introductive Investor cautions about persistent recession signs, suggesting attention on retail sales data for insights.
