FX.co ★ Market Rise: How Rate Cuts Are Pushing Wall Street to Growth

U.S. stock markets showed growth on Monday, driven by market participants analyzing the increasing likelihood of the Federal Reserve lowering interest rates next year and anticipating key economic data this week.

The S&P 500 and Nasdaq indices demonstrated confident growth, while the Dow closed unchanged.

Tom Heinlein, a national investment strategist from U.S. Bank Wealth Management in Minneapolis, noted that markets anticipate the Federal Reserve will start reducing interest rates next year.

Wall Street has been on a rise for seven consecutive weeks, marking the longest weekly growth streak for the S&P 500 since 2017.

Currently, the S&P 500 is about 1.2% below its record high, with growing optimism regarding rate cuts in 2024, though the Federal Reserve attempted to temper this enthusiasm on Monday.

Ostan Gulsbi, President of the Chicago Federal Reserve Bank, warned that the central bank has not committed to reducing rates soon. Loretta Mester, President of the Cleveland Federal Reserve Bank, stated that financial markets have slightly outpaced the central bank regarding the timing and extent of rate cuts.

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Frequent attacks by militant groups on vessels in the Red Sea have led to a rise in oil prices due to supply concerns, subsequently causing an increase in the stock prices of energy companies in the S&P 500 index. Shares in this sector grew by 0.8%.

Shares of United States Steel (X.N) jumped by 26.1% to a more than 12-year high following the announcement of its acquisition by Japan's Nippon Steel (5401.T) for $14.9 billion, including debt.

Apple's (AAPL.O) shares fell by 0.9% amid an intensifying Chinese ban on iPhones and other foreign-manufactured gadgets.

VF Corp (VFC.N) shares dropped by 7.8% following an announcement about an investigation into unauthorized activities in its computer systems, affecting several business aspects, including the ability to fulfill orders on its e-commerce site.

On the New York Stock Exchange, the number of advancing issues outnumbered decliners by a ratio of 1.12 to 1; on Nasdaq, the ratio of 1.15 to 1 favored decliners.

The S&P 500 set 31 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 132 new highs and 107 new lows.

Yields on benchmark 10-year U.S. Treasury notes rose by 1.5 basis points to 3.943% from 3.928% late on Friday. The yield on 30-year bonds increased by 2.5 basis points to 4.0521%, while the yield on two-year notes rose by 0.2 basis points to 4.4569%.

Trading volume on U.S. exchanges amounted to 11.75 billion shares, slightly below the 20-session average of 11.88 billion.