US stocks advanced on Wednesday as expectations for an interest-rate cut at the Federal Reserve’s next meeting helped fuel gains before the Thanksgiving break.
The S&P 500 Index closed 0.7% higher, putting the benchmark on track for a fourth-straight day of gains. The tech-heavy Nasdaq 100 Index gained 0.87%.
“Stocks are celebrating the likelihood of a December rate cut, as it’s becoming clear that the labor market is the priority for the Federal Reserve,” said Paul Stanley, chief investment officer at Granite Bay Wealth Management. “Another rate cut would help to protect against any further cooling of the job market.”
November has been a jittery month for the market, with both the S&P 500 and Nasdaq 100 moving away from their last record highs in late October. Both indexes remain on pace to break a streak of monthly gains as the artificial intelligence sector comes under scrutiny, with a perception of stretched valuations causing some uncertainty.
However, stocks are regaining momentum as dovish remarks from Fed policymakers are boosting hopes for monetary easing next month. Adding to that optimism is Kevin Hassett — a close ally of President Donald Trump — appearing as the frontrunner to be the central bank’s next Chair. Hassett, the director of the White House National Economic Council, is seen as someone who would bring the president’s approach to interest-rate cutting to the Fed.
“It’s becoming more clear that the stock market declines seen over most of November were simply a pullback after an extremely strong run in October and September,” Stanley said, adding that he expects “mild volatility” in stocks between now and the end of the year as investors attempt to price in what 2026 will look like for earnings and the economic picture.
Doug Beath, global equity strategist at Wells Fargo Investment Institute, believes a rate cut in December is likely. Beath points to Fed Chair Jerome Powell signaling that a soft labor market is a greater concern than inflation, along with a “deluge” of government data since in recent weeks not changing those trends.
“We think many investors are missing the main point that the trend of short-term interest rates is lower through 2026, regardless of what happens on Dec. 10 – and that is positive for equity markets,” Beath said.
More Data
The release of economic data — both delayed and fresh — continued on Wednesday morning, with traders holding firm on their high hopes for a December rate cut. Orders of durable goods for September rose in line with expectations, while new applications for unemployment benefits fell last week to the lowest level since mid-April.
“Jobless claims data continue to point to a low hiring but low firing dynamic in the labor market,” Citigroup Inc.’s Gisela Young wrote in a Wednesday note. “We continue to see upside risks for initial jobless claims in coming months as some of the layoffs announced by some corporations in recent months could push claims higher.”
Continuing claims, a proxy for the number of people receiving benefits, edged up to 1.96 million in the previous week.
“Low hiring has pushed continuing claims gradually higher this year,” Young said.
In terms of stock moves, Dell Technologies Inc. climbed after raising its full-year forecast, with analysts noting growth in AI server shipments as a highlight. Petco Health & Wellness Co. surged after boosting its annual earnings guidance, signaling progress in a turnaround.
Deere & Co. slumped as the tractor maker’s forecast for the year disappointed investors. Nutanix Inc. tumbled after the cloud-platform company cut its revenue forecast.
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