Wall Street ends higher as Federal Reserve rate cut bets gather momentum

Economic Data and Federal Reserve Outlook - Recent economic data suggests a potential 25 basis points reduction in the Fed funds target rate at the upcoming monetary policy meeting, with financial markets pricing in an 84.7% likelihood of this occurring, up from 50.1% a week ago [6][12] - The Commerce and Labor departments reported a softening in retail sales and continued cooling of inflation, while consumer confidence showed a worse-than-expected deterioration, with near-term expectations dropping nearly 12% [2][12] - Fed Chair Jerome Powell indicated a hold on rates at the last meeting, but subsequent comments from Fed governors shifted the outlook towards a necessary cut due to weakening job market conditions [6][12] Stock Market Performance - All three major U.S. stock indexes closed positively, with the Dow Jones Industrial Average rising 664.18 points (1.43%) to 47,112.45, the S&P 500 gaining 60.77 points (0.91%) to 6,765.89, and the Nasdaq Composite increasing by 153.59 points (0.67%) to 23,025.59 [11][12] - Among the S&P 500 sectors, healthcare led the gains, while energy shares experienced the steepest percentage decline [7][12] Retail Sector Highlights - The S&P 500 retail index rose by 2.0%, driven by positive earnings reports from retailers such as Kohl's, which surged 42.5%, and Abercrombie & Fitch, which increased by 37.5% after raising their annual earnings forecasts [8][12] - Conversely, Burlington Stores saw a decline of 12.2% after its third-quarter revenue missed estimates [9][12] Technology Sector Developments - Alphabet's shares rose by 1.5% following reports that Meta Platforms is in discussions to utilize Google's AI chips in its data centers starting in 2027 and to rent chips from Google Cloud by next year, with Meta Platforms' shares increasing by 3.8% [9][12] - U.S.-listed shares of Alibaba fell by 2.3% despite beating quarterly revenue expectations [9][12] Market Breadth and Trading Volume - Advancing issues outnumbered decliners by a 4.05-to-1 ratio on the NYSE, with 181 new highs and 45 new lows recorded [10][12] - On the Nasdaq, 3,355 stocks rose against 1,296 that fell, resulting in a 2.59-to-1 ratio of advancing to declining issues [10][12] - Total trading volume on U.S. exchanges was 16.68 billion shares, below the 19.78 billion average over the last 20 trading days [10][12]