Stocks rose in morning trading Tuesday, with technology companies leading the advance as investors assessed fresh retail sales data ahead of a Federal Reserve meeting that will be pivotal to cutting interest rates.
The Dow Jones Industrial Average (^DJI) rose about 0.4%, after the blue-chip index closed at a record high. The S&P 500 (^GSPC) added about 0.5%, approaching an all-time high, while the tech-heavy Nasdaq Composite (^IXIC) rose about 0.8%.
Stocks set for gains as Fed rate cut odds drop to 0.5% crawl upJust a day before officials announce their decision on monetary policy, the central bank’s two-day meeting, which begins Tuesday, is widely expected to lead to its first rate cut since early 2020.
Read more: Fed Forecast 2024: What Experts Say About Possible Rate Cuts
Investors were weighing data that showed retail sales beat Wall Street estimates in August, focusing on signs of slowing consumer spending. The reading is the latest piece of data that could weigh on the Federal Reserve’s thinking about whether to opt for a big interest rate cut rather than a quarter-point move.
Right now, the debate over the path of interest rates is focused on the possibility that a larger cut could spook markets, while some on Wall Street are suggesting that a smaller move could also be disappointing and cause concern.
As of Tuesday, traders see a 63% chance of a 50 basis point rate cut, up from 62% a day earlier. The odds of a 25 basis point rate cut are 37%, according to CME FedWatch Tool.
Meanwhile, Intel (INTC) shares surged after the company secured Amazon (AMZN) as a multibillion-dollar customer for its artificial intelligence chips. Also helping to revive confidence in battered tech stocks was Microsoft (MSFT)’s new plan to buy back up to $60 billion in stock and increase its dividend by 10%.
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