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The Nasdaq and the S&P 500 hit records Monday as Fed officials hinted at a rate cut in December.
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The Fed’s Bostic and Waller nodded to a rate cut this month amid balanced economic and inflation risks.
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Investors are focused on economic data and holiday sales as the market anticipates the Fed’s decision.
US stocks traded mostly higher on Monday, with technology stocks helping the Nasdaq and the S&P 500 hit records as members of the Federal Reserve talked about the potential for another interest rate cut later this month.
Fed President Raphael Bostic told reporters on Monday that while he’s undecided on whether to cut rates at the Fed’s FOMC meeting on December 18, he’s keeping his “options open.”
“The risks to achieving the committee’s dual mandates of maximum employment and price stability have shifted such that they are roughly in balance, so we likewise should begin shifting monetary policy toward a stance that neither stimulates nor restrains economic activity,” Bostic wrote in an essay released on Monday.
Meanwhile, Fed Governor Christopher Waller said Monday that he is “leaning toward” an interest rate cut.
“Based on the economic data in hand today and forecasts that show that inflation will continue on its downward path to 2 percent over the medium term, at present I lean toward supporting a cut to the policy rate at our December meeting,” said at a forum in Washington.
According to the CME FedWatch Tool, markets see a 77% chance of a Fed rate cut at the December 18 FOMC meeting. That chance was at 65% earlier this morning.
With the third-quarter earnings season mostly over, investors will turn their attention to economic data as the holiday shopping season heats up.
Here’s where US indexes stood at the 4:00 p.m. closing bell on Monday:
The retail deal season continued following Black Friday, with Cyber Monday deals set to take over this week.
According to data from Mastercard Spending Pulse, there was a 3.4% year-over-year increase in US retail sales on Black Friday, which included both in-person and online sales.
The bulk of the Black Friday sales gains came from online sales, which were up 14.6%, compared to just a 0.7% increase in in-store sales, according to Mastercard.
“Black Friday was a good indicator of how the holiday season is positively shaping up,” said Michelle Meyer, chief economist at Mastercard Economics Institute.
