NEW YORK — U.S. stock markets opened higher as economic reports scheduled for release failed to alter Wall Street’s optimism for an anticipated significant interest rate cut. The S&P 500 index registered an increase of 0.4%, approaching its record high established in July. Meanwhile, the Dow Jones Industrial Average gained 116 points (0.3%), marking a new record, and the Nasdaq composite rose by 0.7%. Intel’s shares surged after announcing an expanded collaboration with a leading cloud services provider for custom chip production. Treasury yields rose slightly following data indicating stronger-than-expected retail spending last month.
Wall Street rallied in alignment with global markets, building expectations for the first interest rate reduction by the Federal Reserve in over four years, anticipated later this week. Futures trading showed a 0.3% rise for the S&P 500 and a 0.2% increase for the Dow.
Intel’s stock jumped over 7% after the semiconductor manufacturer revealed plans to enhance its long-term partnership in a multi-billion dollar deal centered on AI chip development. Following significant job cuts last month due to disappointing financial results, Intel is focused on achieving $10 billion in savings by 2025, alongside restructuring its struggling foundry division.
Microsoft’s shares climbed nearly 2% following the announcement of a substantial share repurchase program worth $60 billion and a 10% increase in its dividend to 83 cents per share.
Market participants are closely monitoring the Federal Reserve’s upcoming policy decision, marking a potential shift after years of high rates aimed at controlling inflation. The impact of the anticipated interest rate cut on the economy remains a central concern among analysts.
Traders are increasingly leaning toward the possibility of a larger-than-usual rate cut, speculated to be half a percentage point. While lower rates might alleviate financial strain, they also harbor the potential to ignite inflation.
Inflation rates have significantly decreased since their peak two summers ago, allowing the Federal Reserve to shift focus toward bolstering the slowing job market. However, some experts caution that delayed action could heighten recession risks.
As the Federal Reserve prepares for one of its most consequential meetings in recent years, market participants also await August retail sales data, which will shed light on consumer spending patterns amidst a challenging economic landscape.
In European trading, indices showed positive movement, with Germany’s DAX and London’s FTSE 100 gaining 0.6%, while Paris’s CAC 40 increased by 0.5%.
In Asia, Tokyo’s Nikkei index dipped 1% to 36,203.22, while Hong Kong’s Hang Seng advanced 1.4% to 17,660.02. Markets in mainland China and South Korea remained closed.
The Australian S&P/ASX 200 experienced a modest gain of 0.2%, reaching 8,140.90.
The U.S. dollar weakened slightly against the Japanese yen, trading at 140.57 yen amidst expectations of continued monetary policy adjustments by Japan’s central bank. The euro maintained stability, inching up to $1.1136.
Oil prices also experienced slight fluctuations, with U.S. benchmark crude rising 9 cents to $70.18 per barrel, while Brent crude fell 8 cents, adjusting to $72.67 per barrel.
On Monday, the Dow officially surpassed its previous all-time high, closing at 41,622.08, with the S&P 500 gaining 0.1% and the Nasdaq composite slipping by 0.5%.
