On Monday, the Nasdaq stock market reached a new record high, and the S&P 500 also saw some gains. Investors are looking closely at the latest economic data and are excited about the Federal Reserve’s upcoming decision on interest rates, which will be announced on Wednesday.
Most investors believe a rate cut is very likely, with a 95.4% chance of a 0.25% drop. This means the Fed might lower rates to help support the economy. However, experts like Sam Stovall suggest that even with a cut, the Fed may still be cautious and might not plan many more cuts next year than some people expect.
In terms of economic health, the S&P Global reported a drop in manufacturing activity, with the latest numbers showing a reading of 48.3. This is lower than economists predicted and signifies potential issues as higher tariffs could raise prices on imported materials next year.
On the market front, the Dow Jones Industrial Average fell by 110.58 points (0.25%), closing at 43,717.48. Meanwhile, the S&P 500 went up by 22.99 points (0.38%) to reach 6,074.08, and the Nasdaq climbed by 247.17 points (1.24%) to 20,173.89. The Nasdaq has now seen four weeks of gains, while the Dow has dropped for eight straight days.
Prominent companies performed well, with Alphabet (Google’s parent company) rising by 3.6% and Tesla jumping by 6.1%. Tesla’s stock price target was recently raised to a record $515 by Wedbush Securities.
As investors await the Fed’s decision, they will also pay attention to retail sales data coming out on Tuesday to see how strong consumer spending is.
This year, the S&P 500 has grown more than 27% due to optimism around companies benefiting from artificial intelligence, the Fed’s expected rate cuts, a strong economy, and anticipated business-friendly policies from Donald Trump’s upcoming administration.
Honeywell International’s stock rose by 3.7% after they revealed plans to consider separating their aerospace business. Among the stocks traded, more declined than advanced on the NYSE, while there were more advances than declines on the Nasdaq.
Overall, the S&P 500 saw 14 new highs and 18 lows, with the Nasdaq recording 112 new highs and 193 new lows. The total volume of shares traded was 15.33 billion, compared to the average of 14.04 billion shares in the last 20 trading days.
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