US Stocks Close Higher: Dow jumps 662 points as fed signals more cuts; Nvidia rebounds, tech and small caps rally to end volatile week

Market Overview - The Dow Jones increased by 662 points (1.5%) following comments from New York Fed President John Williams suggesting potential rate cuts this year [1] - The Nasdaq and S&P 500 both rose by 1.4%, driven by a rebound in Nvidia shares after reports of possible H200 chip sales to China [1][6] Federal Reserve Insights - John Williams indicated that monetary policy is "modestly restrictive" and sees room for further adjustments, leading to expectations of a rate cut in December, which would be the third cut in 2025 [2][8] - Fed funds futures showed over 70% probability of a rate cut, a significant increase from less than 40% the previous day [3][8] Stock Performance - Rate-sensitive stocks such as Home Depot, Starbucks, and McDonald's experienced gains as investors anticipated that lower rates would enhance consumer spending [3][8] - Despite Friday's gains, all three major indexes (S&P 500, Dow, and Nasdaq) are down for the week, with the S&P 500 and Dow down more than 1% and Nasdaq down approximately 2% [4][8] Sector Movements - The Home Construction ETF (ITB) surged nearly 6%, marking its best day since July 22, as investors speculated on a December rate cut [4][8] - Small-cap stocks saw a rise, with the Russell 2000 increasing by 2.8%, reducing its weekly loss to under 1% [6][8] Company-Specific Developments - Nvidia's stock gained after reports suggested that the Trump administration may approve sales of H200 chips to China, although no final decision has been made [6][8] - Alphabet outperformed other "Magnificent Seven" stocks, rising 2% on Friday and approximately 7% for the week, driven by excitement over its new Gemini 3 AI model and strong TPUs [6][8] - Raymond James resumed coverage of Nvidia with a "strong buy" rating and AMD with an "outperform" rating, citing long-term growth potential for both companies [4][8]