The S&P 500 and the Dow Jones reached a new record high at the close of trading on Monday, as traders aimed to capitalize on the previous week’s gains after the Federal Reserve’s decision to cut interest rates.
The broad market index of 500 largest listed companies in the exchange increased by 0.28% to finish at 5,718.57 points, while the Dow Jones Industrial Average also saw gains, rising by 0.15% to settle at 42,124.65 points. Concurrently, both indices concluded the day at all-time highs. The Nasdaq Composite also inched up by 0.14% to settle at 17,974.27 points.
These movements transpired after a successful trading week on Wall Street, which revolved around the Federal Reserve’s choice to reduce interest rates by 50 basis points – its first cut in four years.
Despite initial turbulence post-announcement, stocks surged in the following days. By the end of the week, the Dow had achieved a record high, notably surpassing the 42,000 mark. Throughout the week, all three major indexes experienced gains exceeding 1%, with the S&P 500 setting new records.
On Monday, investors dissected the latest economic data, with one highlight being a reading marking a 15-month low for PMI manufacturing activity in the U.S. during August.
According to the CME FedWatch Tool, the market is now giving equal odds to a quarter and a half point rate cut at the next meeting in November, while odds for December are seen at 50% for a 75 bps rate cut and 27% for a 50 bps cut.
