Wall Street extended its rally on Wednesday as revived tech stock strength and the increasing probability of a December interest rate cut from the US Federal Reserve put investors in a buying mood the day before the Thanksgiving holiday.
All three major US stock indexes notched their fourth consecutive daily gains, as investors looked past the worries over inflated tech valuations that dragged all three to losses last week.
Those fears ebbed in the aftermath of artificial intelligence chipmaker Nvidia's upbeat quarterly results and forward guidance and were eased further by AI server maker Dell Technologies' consensus-beating fourth-quarter revenue forecast.
The Dow Jones Industrial Average rose 314.67 points, or 0.67 per cent, to 47,427.12, the S&P 500 gained 46.73 points, or 0.69 per cent, to 6,812.61 and the Nasdaq Composite gained 189.10 points, or 0.82 per cent, to 23,214.69.
More gains predicted
A poll conducted by Reuters showed that, on average, analysts expect the S&P 500 to rise by 12 per cent between now and year-end 2026, powered by a robust economy, continued tech sector strength and an accommodative Fed.
The Fed's Beige Book, which summarises economic conditions by district, appeared to have little to no effect on rate cut expectations. Financial markets are currently pricing in an 84.9 per cent probability that the central bank will implement a 25-basis-point reduction to its key Fed funds target rate at the conclusion of its December policy meeting, according to CME's FedWatch tool.
Airline shares lift
Airlines were sharply higher on what is traditionally the busiest travel day of the year for commercial carriers. The S&P 1500 Airlines index jumped 3.0 per cent.
Air traffic is often viewed as a barometer of consumer market health, which bodes well heading into the holiday shopping season, which kicks off on Thanksgiving and is followed by Black Friday and Cyber Monday. The period is crucial for US retailers as they court shoppers and navigate tariff-squeezed profit margins and a wave of corporate layoffs.
Even so, while America’s National Retail Federation forecasts 2025 holiday sales to surpass $US1 trillion ($A1.5 trillion) for the first time, forecasts from discount retailers such as Walmart and Target have been mixed.
