Wall Street rally continues on Federal Reserve rate hike halt expectations

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Wall Street rally continues on Federal Reserve rate hike halt expectations

Wall Street experienced a significant rally on Thursday, driven by investor optimism about a potential end to the Federal Reserve's interest rate hikes. The S&P 500 index rose by 1.8% in late trading and an aggregate increase of 4.8% for the week, potentially marking its strongest weekly performance in almost a year. The Dow Jones Industrial Average and Nasdaq Composite also saw substantial gains.

This positive trajectory was fueled by the Fed's decision to keep interest rates steady and Chair Jerome Powell's comments hinting at a halt in rate hikes. The CME Group’s FedWatch tool indicated an 83% probability of the Fed holding rates steady in December.

Corporate results also played a significant role in the rally, with tech giant Apple (NASDAQ: AAPL )'s after-hours quarterly report being closely scrutinized. Despite concerns over China performance, Apple surpassed Wall Street expectations driven by increased sales of iPhone, particularly iPhone 15 Pro and Pro Max models facing supply constraints, and a $1 billion surge in services revenue that compensated for significant drops in Mac and iPad sales.

Starbucks (NASDAQ: SBUX ) and Qualcomm (NASDAQ: QCOM ) stocks saw sharp increases after their fourth-quarter results beat estimates, with Starbucks outperforming revenue and earnings expectations. Shopify (NYSE: SHOP )'s Q3 profit was attributed to AI adoption resulted in a 15% share increase.

The 10-year Treasury yield dipped to a two-week low as futures on major US stock indexes rose following Powell's comments. Justin Burgin of Ameriprise Financial (NYSE: AMP ) pointed to Powell's comments and better-than-expected earnings as reasons for market optimism.

However, Jamie Dimon warned of potential rate hikes during his Yahoo Finance interview, indicating that despite the current optimism, uncertainties still persist in the market.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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