Nasdaq Index, Dow Jones, S&P 500 News: Stocks Climb as Fed Rate Cut Expectations Grow

Highlights

• Wall Street up on Fed rate cut hopes.
• Global banks’ policies boost market confidence.
• Bullish short-term stock market forecast.

Wall Street Rallies on Fed Rate Cut Hopes

Wall Street’s main stock indexes, including the Dow, S&P 500, and Nasdaq, opened higher Tuesday, buoyed by investor optimism over a potential Federal Reserve policy shift in the coming year. The market’s upbeat mood is underpinned by the Dow trading up at 37449.81 (+0.39%), the S&P 500 at 4755.33 (+0.31%), and the Nasdaq at 14961.56 (+0.38%).

Global Central Banks and Market Dynamics

The Bank of Japan’s decision to maintain its ultra-loose monetary policy until next year aligns it with other G4 central banks, reinforcing bullish sentiments in global markets. Investors, already excited about possible U.S. and European interest rate cuts, reacted to the BOJ’s stance, which keeps the yen weak and boosts Japanese stocks. San Francisco Fed President Mary Daly’s comments, hinting at potential Fed rate cuts due to improving inflation, further fuel the market’s bullish expectations.

Treasury Yields and Investor Sentiment

Investor enthusiasm is palpable, as evidenced by the SPDR S&P 500 ETF Trust (SPY) reporting a massive net inflow of $20.8 billion. This investor optimism is mirrored in the Treasury market, where ten-year yields tested 3.90%, close to a five-month low. The housing market also showed strength, with November housing starts exceeding expectations at 1.56 million units.

Company-Specific Movements

In company news, UBS shares climbed 1.6% following an investment by Cevian Capital, and Apple announced a pause in sales of certain smartwatches amidst a patent dispute. Enphase Energy and Kenvue led the gains in the S&P 500, while significant premarket movers included Amgen, Sunnova, and Arvinas, all benefiting from positive analyst upgrades.

Short-term Forecast

Given the current market trend, supported by central bank policies and strong economic indicators, the short-term outlook for the stock market appears bullish. This sentiment is further bolstered by the potential for relaxed monetary policies and a resilient housing market.

Technical Analysis

The E-mini S&P 500 Index, currently at 4806.00, shows a bullish trend, positioned well above both its 200-day and 50-day moving averages, at 4445.25 and 4511.66, respectively.

This placement above key moving averages indicates strong upward momentum. Furthermore, the Index is trading above the main support level at 4494.00, reinforcing the bullish sentiment. The absence of defined minor and main resistance levels suggests a potential for further upward movement without significant technical barriers.

Overall, the market sentiment for the E-mini S&P 500 Index appears bullish, reflecting strong buyer interest and positive momentum.