Fed Rate Cut Expectations Lifted Wall Street

Rising Wind on Wall Street

The New York stock exchange rose as hopes increased that the Federal Reserve (Fed) may lower interest rates next week. The stock market concluded the week on a positive note, drawing investors' attention.

Increase in Dow Jones and S&P 500

At the close, the Dow Jones index gained over 100 points, rising by %0.22 to reach 47,954.99 points. The S&P 500 index increased by %0.19, climbing to 6,870.40 points. Additionally, the Nasdaq index rose by %0.31, reaching 23,578.13 points.

Economic Data and Consumer Confidence

The macroeconomic data released by the U.S. positively impacted investors. Despite mixed signals in the labor market, recent reports provided favorable clues regarding inflation outlook. According to data released by the U.S. Department of Commerce, personal consumption expenditures increased by %0.3 in September.

In particular, the core personal consumption expenditures price index, which the Fed considers as an inflation indicator, recorded a monthly increase of %0.2 and an annual increase of %2.8 in September. The index, which was expected to increase by %2.9 on an annual basis, showed increases of %0.2 and %2.9 in both directions in August.

Consumer Confidence is Rising

The consumer confidence index measured by the University of Michigan rose to 53.3 in December, surpassing market expectations. This indicates that consumer confidence has increased for the first time in 5 months. Meanwhile, short-term inflation expectations decreased from %4.5 to %4.1, reaching the lowest level since January.

Corporate Developments

Another notable development in global markets is Netflix's $72 billion deal with Warner Bros. Discovery. This agreement covers film and television studios. Following the news, Netflix's shares decreased by %2.9, while Warner Bros. Discovery's shares increased by %6.3.

Conclusion

Possible interest rate cuts at the Federal Open Market Committee meeting scheduled for December 9-10 continue to raise hopes in the markets. In the money markets, the likelihood of a 25-basis point cut in the policy rate is being priced at %87.