Stock Market Surge: Hopes for Fed Rate Cuts Boost Wall Street

Wall Street experienced gains on Monday as the dollar weakened. The Dow Jones rose 0.46%, S&P 500 gained 0.4%, and Nasdaq increased 0.34%. Investors are optimistic about the Federal Reserve easing interest rates, driving expectations for a potential rate cut announcement from Fed Chair Jerome Powell later this week.

Wall Street rallied on Monday as the dollar dipped, spurred by optimism that the U.S. economy might bypass a recession and decreasing inflation could instigate interest rate cuts. The Dow Jones Industrial Average climbed 0.46% to 40,846.81, the S&P 500 increased 0.4% to 5,576.22, and the Nasdaq Composite saw a 0.34% rise to 17,691.80. MSCI's world stock index edged up approximately 0.6%.

The potential for lower borrowing costs couldn't sustain gold's historic highs, as the dollar fell against the euro while the yen rose. Federal Reserve officials Mary Daly and Austan Goolsbee signaled the possibility of easing in September, with the impending minutes of the last policy meeting expected to reinforce this outlook.

Investor attention is turned toward Friday when Fed Chair Jerome Powell is set to speak in Jackson Hole, likely addressing rate cut considerations. "All eyes are on this Friday for any hints on the scale of upcoming rate cuts," noted Paul O'Neill, CIO at Bentley Reid. Futures suggest a fully priced quarter-point move, with a 25% chance of a 50 basis points cut, subject to the next payrolls report influential data.

(With inputs from agencies.)