Nasdaq Soars on Fed Rate Cut Anticipation

The Nasdaq reached a record high, driven by investor anticipation of a Federal Reserve interest rate cut. While market optimism continues, economic data presents mixed signals. Growth in AI-related companies and supportive policies are contributing to broader market gains, with cryptocurrency stocks seeing a particular boost as bitcoin rallies.

The Nasdaq achieved a historic high as investors anticipated a Federal Reserve interest rate cut. The S&P 500 also saw gains, riding on expectations surrounding the Fed's policy announcement. The likelihood of a 25 basis point cut has reached 95.4%, according to CME's FedWatch Tool.

Sam Stovall, chief investment strategist at CFRA Research, described a potential 'hawkish cut', indicating a rate reduction with cautious future guidance. The market is keenly observing economic indicators such as the manufacturing PMI and factory production levels, which have shown declines, potentially due to tariff hikes on imported materials.

Major growth stocks like Alphabet and Tesla led sector gains, with Wedbush Securities notably raising Tesla's price target to $515. Cryptocurrency stocks soared as bitcoin surpassed $107,000, buoyed by expectations of favorable policies from the new U.S. administration. Despite these positive trends, retail sales data will be crucial to monitor for ongoing consumer strength.

(With inputs from agencies.)