The final session results indicate that the Dow Jones Industrial Average rose 0.67%, the Nasdaq increased by 0.82%, and the broad S&P500 gained 0.69%.
“Risk appetite increased on the eve of Thanksgiving,” a holiday during which financial markets are closed, commented Jose Torres of Interactive Brokers.
Meanwhile, Friday’s session will be shortened by three hours.
“Stocks continue to show widespread strength, following an increased likelihood of an interest rate cut in December,” noted analysts from Briefing.com.
Several economic indicators published this week have reassured investors about the potential for a rate cut at the Fed’s monetary policy committee (FOMC) meeting on December 9 and 10.
Today, the Fed’s Beige Book, based on a regular survey of economic operators, indicated that the labor market continues to deteriorate, while inflation remains steady.
These expectations were further reinforced by press reports suggesting Kevin Hassett as the favorite to succeed Fed Chairman Jerome Powell next year, according to Torres.
As the chief economic advisor to Donald Trump, Hassett supports, much like Trump, a reduction in the Fed’s interest rates.
Among stocks, “there was a healthy rotation: investors sold off highly capitalized technology stocks and invested in a broader and more varied range of companies,” said Jack Albin of Cresset.
Reflecting this shift, the Russell 2000 index, which includes two thousand small and mid-sized enterprises (SMEs), advanced 0.87%, nearing the record set in October.
SMEs traditionally thrive in an environment with low interest rates and a positive economic climate.
