Market Rally: Stocks and Gold Soar Amid Fed Rate Cut Speculations

U.S. stocks and gold prices surged, driven by speculation of a significant Federal Reserve interest rate cut. Market optimism grew after articles suggested the cut could be substantial, and comments from former New York Fed President Bill Dudley supported this sentiment. The dollar weakened amid these developments, impacting global markets.

U.S. stocks opened higher on Friday, with gold reaching a record high, fueled by investor anticipation of a substantial Federal Reserve interest rate cut next week.

Market optimism soared as traders adjusted the likelihood of a half-point rate cut from the Fed to 41%, up from 14% the previous day. This shift followed reports from the Financial Times and Wall Street Journal describing the decision as a 'close call.' Early trading saw the Dow Jones Industrial Average rise by 0.36%, the S&P 500 increase by 0.26%, and the Nasdaq Composite climb by 0.16%.

Former New York Fed President Bill Dudley bolstered hopes for a major cut, stating in Singapore that there was a 'strong case for 50.' Analyst notes also highlighted the anticipated dovish direction of the Fed's forward guidance. The dollar fell sharply, influenced by hawkish remarks from Bank of Japan officials and weakening against major currencies.

(With inputs from agencies.)