Nasdaq 100 and S&P500: Fed Minutes Boost US Stocks as Rate Cut Bets Strengthen

Stocks Extend Rally as Fed Minutes Signal More Rate Cuts Ahead

U.S. stocks advanced Wednesday as traders digested Federal Reserve minutes that pointed toward additional rate cuts later this year. The S&P 500 gained 0.6%, the Nasdaq rose 0.9%, and the Dow Jones Industrial Average added 147 points, or 0.3%. The move came late in the session after investors parsed details showing policymakers’ growing concern over the labor market and diminishing inflation risks—supporting the case for further easing.

Will the Federal Reserve Deliver Another Cut?

Minutes from the Fed’s September meeting showed that “around half” of officials expect two rate cuts by year-end, while others see room for three. The committee voted 11-1 to lower rates by 25 basis points in September, the first move of the year.

The minutes indicated near-unanimous agreement that softening employment conditions justify additional easing. Officials noted inflation pressures have either stabilized or declined, giving the central bank room to act.

Traders now price in a 96% probability of another rate cut at the next meeting, underscoring market conviction that policy will turn more supportive as the labor market cools.

How Are Markets Responding to Policy Expectations?

Wall Street appeared confident that the Fed’s dovish stance will sustain equity momentum. The S&P 500’s technology and utilities sectors led gains, both nearing new highs.

Nvidia rallied over 1% after CEO Jensen Huang said chip demand has accelerated over the past six months, adding optimism around the AI trade that has driven much of this year’s market strength.

Huang also confirmed Nvidia’s financial involvement in Elon Musk’s xAI venture, highlighting continued capital inflows into the AI ecosystem.

Can Nvidia Keep Driving Tech Sentiment?

The renewed rise in Nvidia shares helped offset earlier weakness tied to Oracle’s disappointing cloud margins, which had raised concerns about excessive optimism in the AI space.

While some analysts warn of parallels to the late-1990s tech bubble, others note that continued enterprise and infrastructure investment still supports the sector. Traders remain attentive to potential corrections in tech-heavy indexes but view sustained demand for chips as a sign of resilience.

Will the Government Shutdown Complicate the Fed’s Path?

The ongoing U.S. government shutdown, now in its eighth day, adds uncertainty to the policy outlook. Delays in key data releases, including the September employment report, could hinder the Fed’s ability to assess economic conditions. The Senate again failed to pass competing funding bills, leaving markets wary of prolonged disruption.

Market Forecast

With inflation risks subsiding and the labor market under pressure, the Fed appears poised to ease further this year. Equities could see continued upside if upcoming inflation data—assuming it’s released—reinforces the case for another cut.

Traders will monitor upcoming Fed speeches and CPI readings closely, as confirmation of a softening trend could strengthen risk appetite heading into the next policy meeting.

More Information in our Economic Calendar.