Markets Rally as Nasdaq Hits Record Highs

The S&P 500 and Nasdaq rallied as investors anticipate a Federal Reserve interest rate cut. Major growth stocks surged, boosting sectors including communication services. With expectations set for a rate reduction, focus shifts to the Fed's outlook for 2025 amid robust economic growth and inflation.

The S&P 500 and Nasdaq saw gains on Monday, driven by expectations of a Federal Reserve interest rate cut later this week. Investors keenly awaited key data releases to gauge monetary policy for next year, with the Fed's decision expected on Wednesday.

Growth stocks, including Alphabet and Amazon, bolstered the market, lifting both the communication services and consumer discretionary sectors. The Nasdaq 100 set new records, reflecting investor confidence as the year-end 'Santa rally' takes hold. Meanwhile, the Dow Jones slightly dipped.

Honeywell's stock climbed following news of a potential aerospace business spin-off, while Tesla surged after a revised price target. The crypto sector rallied as bitcoin hit new highs, further invigorated by MicroStrategy's inclusion in the Nasdaq 100 index.

(With inputs from agencies.)