Stock Market Surges As Fed Rate-Cut Expected

The stock market experienced a significant surge on Monday, with the Nasdaq Composite reaching a record high as major tech stocks rallied ahead of the Federal Reserve's anticipated interest rate decision. Investors are optimistic about a potential rate cut, which could further boost market momentum.

Key Takeaways

• Nasdaq Composite rose 1.2%, hitting a new record high.
• Major tech stocks like Tesla, Google, Amazon, and Apple closed at all-time highs.
• S&P 500 gained nearly 0.4%, while the Dow Jones fell 0.2%.
• Investors expect a 25 basis point rate cut from the Fed on Wednesday.
• Bitcoin surged to an all-time high above $107,000.

Nasdaq Hits Record High

The Nasdaq Composite (^IXIC) notched a fresh record high on Monday, climbing 1.2% as most of the Big Tech stocks gained traction. Shares of Alphabet (GOOGL), Tesla (TSLA), Amazon (AMZN), Apple (AAPL), and Broadcom (AVGO) all closed at fresh records, reflecting strong investor sentiment.

Anticipation of Fed Rate Cut

Investors are eagerly awaiting the Federal Reserve's final policy meeting of the year, which begins on Tuesday. The focus is on the interest rate decision expected on Wednesday, with 97% of traders pricing in a 25 basis point cut. This anticipated move is seen as a catalyst to revive the stock market's stellar rally this year.

Mixed Performance Among Indices

While the Nasdaq soared, the S&P 500 (^GSPC) gained almost 0.4%, moving closer to its own record. In contrast, the Dow Jones Industrial Average (^DJI) fell 0.2%, marking its eighth consecutive session in the red. This divergence highlights the varying performance among different sectors of the market.

Corporate Developments

On the corporate front, healthcare stocks such as CVS, UnitedHealth, and Cigna saw declines after President-elect Donald Trump announced plans to eliminate the middleman in prescription drug pricing. This statement refers to pharmacy benefit managers (PBMs), which have been criticized for contributing to rising drug costs.

Bitcoin's Record Surge

In the cryptocurrency market, Bitcoin (BTC-USD) surged to an all-time high above $107,000, driven by optimism surrounding a crypto-friendly administration under Trump. This surge has positively impacted related stocks, including MicroStrategy (MSTR), which is set to join the Nasdaq 100.

Conclusion

As the market gears up for the Federal Reserve's decision, the overall sentiment remains positive. The anticipated rate cut could provide the necessary support for continued growth in the stock market, particularly among tech stocks and cryptocurrencies. Investors will be closely monitoring the Fed's announcements and economic indicators in the coming days.

Sources

• Stock market today: Nasdaq soars to record as Tesla, Google, Amazon, Apple hit fresh highs, Yahoo Finance.
• Stock market today: Nasdaq soars to record as Tesla, Google, Amazon, Apple hit fresh highs, Yahoo Finance.
• US Stocks Close Higher With Fed Rate-Cut Expected: Markets Wrap, Yahoo Finance.
• Stock market today: Nasdaq hits a record as Wall Street drifts ahead of Federal Reserve's meeting, Yahoo Finance.
• Stock market today: Nasdaq soars to record as Tesla, Google, Amazon, Apple hit fresh highs, Yahoo Finance.