Wall Street Rises as Investors Assess Fed's Rate Cut Moves

Wall Street’s main indexes rose on Monday as investors evaluated the Federal Reserve’s recent rate cut and comments from policymakers. Stocks have gained sharply following the Fed's decision, with notable performances from Tesla and Meta Platforms. Attention now turns to upcoming inflation data, as markets anticipate future rate cuts.

Wall Street's major indexes climbed in mid-afternoon trading on Monday, driven by investor analysis of the Federal Reserve's recent rate cut. The market's gains build on last week's sharp rally after the central bank reduced interest rates.

The Fed's decision, which spurred major indexes to monthly gains, defied September's reputation as a weak month for equities. Investors focused on comments from various policymakers for insights into why the Fed initiated its easing cycle with a significant 50 basis-point cut.

Fed officials like Raphael Bostic, Neel Kashkari, and Austan Goolsbee backed the rate cut and supported further cuts for the year. Initial trader bets, according to CME Group's FedWatch, favored a larger move at November's meeting. Recent data also shows steady U.S. business activity and rising prices, hinting at potential inflation increases ahead.

Sam Stovall, CFRA Research's chief investment strategist, noted that investors maintain a 'wait-and-see' stance regarding the likelihood of a soft landing. At 2:52 p.m. EDT, the Dow Jones rose by 54.15 points (0.13%), the S&P 500 gained 13.21 points (0.23%), and the Nasdaq Composite went up by 30.50 points (0.17%). Eight of the 11 S&P 500 sectors saw gains, led by consumer discretionary stocks.

The S&P 500 remains near an all-time high, and the Dow reached a new intraday record. Rate-sensitive stocks like Tesla (up 4.59%) and Meta Platforms (up 0.65%) performed well. On the other hand, the Russell 2000 index, tracking small caps, decreased by 0.23%. The week's significant catalyst is anticipated to be the Fed's preferred inflation gauge's August figure, released this Friday.

Significant movers included Intel rising by 3.41% following a report on a potential $5 billion investment by Apollo, while General Motors dropped 2.31% after a stock downgrade. On the NYSE, advancing issues outnumbered decliners, and there were numerous new highs and lows recorded across indexes.

(With inputs from agencies.)