In hopes that the Federal Reserve will soon stop hiking benchmark interest rates, investors lifted stocks on Wednesday. On top of their already substantial monthly gains, traders also attempted to expand.
Gaining 66 points, or 0.2%, was the Dow Jones Industrial Average. The Nasdaq Composite gained 0.7%, and the S&P 500 increased by 0.5% respectively.
The announcement of a $10 billion buyback and dividend increase sent General Motors’ shares down 11%. After Elliott Investment Management invested $1 billion in the petroleum company Phillips 66, the stock of the company surged by 3%.
The third quarter’s GDP increased faster than anticipated, with an annualised growth rate of 5.2%, according to figures released on Wednesday. The increase was mostly the result of changes made to government expenditure and investments made in nonresidential buildings.
Tuesday saw just slight increases in the major averages. The Nasdaq Composite increased by almost 0.3%, while the S&P 500 gained 0.1%. There was a 0.2% increase on the Dow.
On Tuesday, Governor Christopher Waller of the Federal Reserve stated that the present monetary policy seemed to be sufficiently restrictive to bring inflation back down to the 2% target set by the central bank. The remarks raised investor confidence and helped the market rise in value.
The founder and president of Vital Knowledge, Adam Crisafulli, stated on CNBC’s “Closing Bell: Overtime” on Tuesday that “markets are already way ahead of where Waller changed the Fed to.”
There is now just one question left: Will the Fed begin pressuring more forcefully once more on the anticipated rate cuts for next year? He also mentioned that there would likely be a plethora of significant economic data released between now and the next meeting. “It appears that investors are merely awaiting clarification on that aspect.”
According to the CME FedWatch Tool, the central bank may actually lower rates as early as next spring based on fed funds futures prices.
Source (CNBC)
