US stocks ended higher on Thursday, fueled by growing optimism that the Federal Reserve could soon cut interest rates. Investor sentiment surged as recent economic data showed cooling inflation, reinforcing expectations of policy easing. The S&P 500 gained 0.8%, while the Nasdaq climbed 1.2%, led by tech stocks that thrive on lower borrowing costs.
The positive momentum extended into bonds, where yields fell sharply. The 10-year Treasury yield dropped to 4.23%, signaling confidence in a potential rate adjustment. Wall Street analysts note that the Fed’s patient stance has been pivotal, with markets now pricing in a possible cut by early next year.
Tech heavyweights like Apple and Microsoft led the rally, pushing the Nasdaq to new weekly highs. Meanwhile, the Dow Jones also rose 0.6%, supported by gains in industrials and consumer staples. Traders remain cautious but optimistic, balancing growth concerns with expectations of looser monetary policy.
Market watchers are now eyeing the upcoming Fed meeting for clearer signals. Analysts believe that the central bank’s response to the economic slowdown will be critical. With inflation softening and growth moderating, the Fed is under pressure to sustain recovery without risking overheating.
