Dow Gains 49, Nasdaq Soars 208, S&P 500 Rises 31

Wall Street Hits New Records as Market Eyes Fed's Rate Decision

Wall Street saw a strong start to the week, with major indices reaching new highs. The S&P 500 climbed 0.5% and surpassed its previous all-time high, while the Nasdaq composite added 0.9% to set another record. The Dow Jones Industrial Average rose by 49 points, or 0.1%, marking a modest gain for the blue-chip index.

One of the key drivers behind the market’s momentum was Tesla, which surged 3.6% after Elon Musk made a significant stock purchase through a trust. This move came as Tesla’s stock had been slightly down for the year, and the transaction may signal Musk’s confidence in the company’s future.

Alphabet, the parent company of Google, played a major role in lifting the S&P 500, gaining 4.5% and pushing its total value above $3 trillion. Alongside Apple, Microsoft, and Nvidia, Alphabet is among the few companies valued at over $3 trillion.

The main event of the week will be the Federal Reserve’s decision on interest rates, expected to occur on Wednesday. Analysts anticipate the first rate cut of the year, which could provide a boost to the job market, currently showing signs of slowing. However, stocks have already priced in this expectation, and there are high hopes that the Fed will continue cutting rates throughout the year and into 2026. This could lead to market disappointment if the pace of cuts falls short of expectations.

Investors will closely watch what Federal Reserve Chair Jerome Powell says during his press conference following the rate decision. The Fed will also release updated economic projections, which could offer further insights into future policy directions.

Inflation remains a concern for the Fed, especially with the potential impact of President Donald Trump’s tariffs. Lower interest rates could fuel inflation, which has already proven difficult to bring under control. Additionally, a slowdown in the job market could lead to a recession, which might negatively affect corporate profits despite lower borrowing costs.

Trump has been vocal about his desire for aggressive rate cuts, frequently criticizing Powell and attempting to remove one of the Fed’s governors from its board. On social media, he urged Powell to cut rates more than anticipated, using his signature all-caps style.

On the stock market, Intel gained 2.9% after adjusting its expense forecast following the sale of a 51% stake in its Altera business to Silver Lake. This positive development helped offset a sharp drop in Hain Celestial, which reported larger losses than the previous year. The company is taking steps to stabilize sales amid performance concerns.

Alaska Air Group fell 6.7% due to higher fuel costs and operational challenges caused by bad weather and air-traffic control issues. Despite strong demand for premium seats, the airline expects third-quarter results to fall within the lower end of its forecast range.

Nvidia experienced a slight decline of less than 0.1% after China accused the chipmaker of violating antimonopoly laws. Chinese regulators did not specify any penalties but indicated they would conduct further investigations.

Overall, the S&P 500 closed up 30.99 points at 6,615.28, the Dow Jones Industrial Average added 49.23 to reach 45,883.45, and the Nasdaq composite climbed 207.65 to 22,348.75.

In the bond market, Treasury yields continued their downward trend, reflecting expectations of upcoming rate cuts. A recent report showed manufacturing activity in New York state shrinking, contrary to expectations of growth. This marks the first contraction since June.

The next major economic update will come on Tuesday, when the U.S. government releases data on retail spending. The yield on the 10-year Treasury fell to 4.03% from 4.06% late Friday.

Globally, France’s CAC 40 rose 0.9%, while other European and Asian markets saw more modest gains.