The Nasdaq led the way in market gains on Wednesday, boosted by Nvidia and signals from the Federal Reserve about potential interest rate cuts in September. This news caused all three major indexes to surge before moderating their gains.
The Nasdaq composite showed significant momentum, with a surge of over 3% at one point before settling to a 2.6% increase. This index seemed to have broken past its 50-day moving average after dropping below it a week ago. Meanwhile, the S&P 500 also regained its 50-day line, rising 1.6%.
The Dow Jones Industrial Average lagged behind, primarily due to Microsoft’s performance, closing the day with a modest 0.2% gain. The Russell 2000, composed of small-cap stocks, added 1%, reaching over a 2% gain at one point.
Trading volume was higher on both the Nasdaq and the New York Stock Exchange compared to the previous day. Winners outnumbered losers on both exchanges.
In the bond market, the 10-year Treasury yield dropped by eight basis points to 4.06%, while U.S. crude oil prices rose to $78.39 a barrel.
The Fed’s announcement about a potential rate cut in September, combined with Nvidia’s strong performance following Microsoft’s capital expenditure plans, contributed to the market’s overall optimism.
Federal Reserve Chairman Jerome Powell emphasized that any rate cut decision would be data-driven. He highlighted the solid economic growth but noted a cooling labor market, suggesting a favorable environment for rate reductions.
Looking ahead, the market appears to be reacting positively to the prospect of easing interest rates and the potential impact on various sectors, such as technology and energy. Investors will continue to monitor economic data and corporate earnings reports for further insights into market movements.
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