US Stocks Climb on Rising Hopes for Fed Rate Cut
The Dow Jones Industrial Average gained 1.43%, or 664.18 points, to finish at 47,112.45. The Nasdaq advanced 0.67%, or 153.59 points, reaching 23,025.59, while the S&P 500 rose 0.91%, or 60.76 points, to close at 6,765.88.
Meanwhile, the Volatility Index (VIX), commonly referred to as the "fear index," declined 9.55% to 18.56.
The upward movement in stocks coincided with mounting expectations that the Federal Reserve will implement further interest rate cuts in December.
According to CME FedWatch, investors are pricing in an 85% likelihood of a rate reduction in the upcoming month. Analysts, however, cautioned that despite the growing speculation about a rate cut, "risks persist for disagreements among members at the Fed's monetary policy meeting next month."
On the policy front, Treasury Secretary Scott Bessent told a news agency on Tuesday that "President Donald Trump is likely to announce a new chairman of the US Federal Reserve before Christmas."
US outlets reported that White House National Economic Council Director Kevin Hassett is being considered as one of the possible contenders for the next Fed chair.
On the economic data side, US producer prices aligned with forecasts in September.
The Producer Price Index (PPI) increased 0.3% month-over-month and rose 2.7% year-over-year, reflecting steady inflationary trends.
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