NEW YORK — U.S. stock indexes are trending upward as investors await a significant meeting by the Federal Reserve later this week, which may influence Wall Street’s trajectory into the upcoming year.
The S&P 500 saw a morning increase of 0.3%, recovering from its first losing week in four. The Dow Jones Industrial Average gained 90 points, or 0.2%, by 10:05 a.m. Eastern time, while the Nasdaq composite rose 0.5%.
MicroStrategy’s stock climbed 2.8%, driven by the soaring price of bitcoin, which recently hit another record high. The company has been actively accumulating bitcoin, resulting in its stock price increasing more than sixfold this year, and it is set to join the Nasdaq 100 index shortly.
Bitcoin reached a peak of over $106,000 before retracting to around $105,600. Since the beginning of the year, it has risen from approximately $44,000, fueled by growing optimism regarding favorable regulatory conditions for digital currencies.
The market’s primary spotlight will be on Wednesday as the Federal Reserve is expected to announce its final decision on interest rates for the year. Many anticipate a third consecutive rate cut, aimed at supporting the slowing job market while bringing inflation closer to its target of 2%.
Analysts are questioning the extent of potential future rate cuts in 2025, as the Fed will issue projections for the federal funds rate and other economic indicators following the meeting. Fed Chair Jerome Powell will address the media afterward.
Currently, market expectations suggest the Fed may implement two more rate cuts in 2025, although this outlook has been dampened by recent reports indicating that achieving the 2% inflation target might prove challenging. Concerns have also arisen regarding possible inflationary implications arising from policy changes.
Anticipations of ongoing rate cuts have been a significant factor in the S&P 500 achieving an unprecedented 57 all-time highs this year, putting it on track for an exceptional performance. Despite initial fears, the economy has demonstrated resilience, continuing to grow even after the Fed raised interest rates to a two-decade high in an effort to reduce inflation, which peaked at over 9% two summers ago.
On Wall Street, shares of Broadcom surged 9.7%, marking a strong contribution to the S&P 500 for a second successive day, following a profit report that exceeded projections and an optimistic revenue forecast bolstered by its advancements in artificial intelligence.
Honeywell’s shares rose 3% after revealing plans to evaluate a spin-off or sale of its aerospace division, with more details expected in its upcoming fourth-quarter earnings report.
These gains countered a decline in Nvidia’s stock, which dropped 1.9%. Despite its recent dip, Nvidia remains a heavyweight in the market, with a total valuation surpassing $3 trillion, making it the largest weight on the S&P 500 index.
In the bond market, Treasury yields experienced slight declines, with the yield on the 10-year Treasury falling to 4.38% from 4.40% late last week, and the two-year yield dropping to 4.23% from 4.25%.
Internationally, stock markets displayed modest declines across Europe and Asia, with Hong Kong indexes dropping 0.9% and Shanghai falling 0.2%, following underwhelming economic data from China.
In South Korea, the Kospi index also fell 0.2% amid political turmoil as law enforcement sought to summon impeached President Yoon Suk Yeol for questioning over a controversial martial law decree.
