Wall Street extends gains as Fed rate-cut bets for December grow

Wall Street’s main indexes rose for a fourth consecutive session on Wednesday, as investors doubled down on bets the Federal Reserve will cut interest rates in December.

Tech stocks were in the lead following AI-server maker Dell’s strong forecasts, helping the S&P 500 and the Nasdaq touch two-week highs.

Investors were also digesting mixed economic data after jobless claims fell last week, while new orders for capital goods surged in September.

“The economy isn’t slipping into recession, but it’s weak enough to allow the Fed another cut. There’s still a high amount of people that are on unemployment, so this gives the Fed headroom to be able to cut some more,” said Kim Forrest, chief investment officer at Bokeh Capital Partners.

On the back of softer consumer demand signals and dovish remarks from key Fed officials, traders are now pricing in an 84.9% chance of a 25-basis-point rate cut next month – nearly double last week’s odds, CME’s FedWatch tool showed.

Focus will now be on the central bank’s snapshot of economic conditions, called the Beige Book, expected at 2 p.m. ET.

Investors were also weighing a report suggesting White House economic adviser Kevin Hassett was a frontrunner to be the next Fed Chair, at a time when political influence in monetary policymaking has been a concern.

At 11:25 a.m. ET the Dow Jones Industrial Average rose 359.66 points, or 0.76%, to 47,472.11, the S&P 500 gained 55.61 points, or 0.82%, to 6,821.49 and the Nasdaq Composite gained 212.96 points, or 0.93%, to 23,238.55.

Wall Street’s recent recovery from a tech-led selloff earlier this month has trimmed monthly losses on the main indexes. It would still be their biggest monthly losses since the U.S. tariff rout earlier this year.

Lifting some of the gloom on Wednesday was a 5.8% rise in Dell after its quarterly forecasts surpassed expectations, supported by strong demand for its servers in AI data centers.

Tech stocks rose 1.4% and led broad sectoral advances on the S&P 500, while chip stocks added 2.8% and Nvidia climbed 1.2%.

Traders were also bracing for the busy holiday shopping period – Thanksgiving on Thursday, followed by Black Friday and Cyber Monday – a stretch when trading volumes typically thin out and price swings could sharpen. The period will be pivotal for big-box retailers as they court shoppers squeezed by tariff-driven price increases and a wave of corporate layoffs.

Results and forecasts from retailers such as Walmart and Target have been mixed even as the National Retail Federation expects this year’s holiday sales to top $1 trillion for the first time.

The holiday period will also be a busy time for air travel, ahead of which airline stocks advanced 3.6% to hit a more than two-month high.

Workday lost 10% after the human resources software provider reported third-quarter subscription revenue in line with estimates, while Deere lost 5.1% after forecasting annual profit below estimates, pressured by tariff impacts.

Advancing issues outnumbered decliners by a 3.71-to-1 ratio on the NYSE and by a 2.02-to-1 ratio on the Nasdaq.

The S&P 500 posted 27 new 52-week highs and no new lows while the Nasdaq Composite recorded 99 new highs and 37 new lows.