New York stocks rebounded to close higher on remarks from a Federal Reserve official hinting at the possibility of cutting the benchmark interest rate.
On the 21st (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average finished at 46,245.41, up 493.15 points (1.08%) from the previous day. The Standard & Poor's (S&P) 500 index closed at 6,602.99, up 64.23 points (0.98%), and the tech-heavy Nasdaq composite ended at 22,273.08, up 195.03 points (0.88%), respectively.
New York stocks were under strong upward pressure on remarks by John Williams, president of the Federal Reserve Bank of New York. He said, "Although somewhat less so due to the Fed's recent (rate-cut) actions, I see the current monetary policy stance as moderately restrictive," adding, "Therefore, I believe there is still room to further adjust the benchmark rate in the near future."
President Williams oversees the New York Fed, which conducts open market operations. Wall Street took his comments as more than a personal view, seeing them as likely coordinated with Federal Reserve Chair Jerome Powell.
Market expectations for a December rate cut also rose quickly. According to the CME Group's FedWatch, the fed funds futures market priced in the probability that the Fed will cut the benchmark rate by 0.25 percentage point at the Federal Open Market Committee (FOMC) meeting on Dec. 9–10 at about 71.5%. As recently as a day earlier, the probability was only 39%.
New York stocks also gained stronger momentum on news that the Trump administration is reviewing lifting export controls on some GPUs. Bloomberg reported that the Trump administration is internally reviewing a plan to allow sales to China of Nvidia's "H200" GPU. The United States has imposed export restrictions on advanced GPUs since 2022, but there is now a possibility of lifting controls on some products.
Fortunes diverged among the Magnificent 7, meaning the seven giant tech companies. Nvidia (-0.97%), the leading AI stock that had plunged as much as 4.27% intraday, recovered a substantial portion by the close. Alphabet (Alphabet Class A), Google's parent company, rose 3.56%. Amazon (1.63%), Apple (1.97%), and Meta Platforms (0.87%) also gained. In contrast, Tesla (-1.05%) and Microsoft (-1.32%) lagged.
On expectations that rate cuts will support economic growth and consumption, discretionary names such as The Home Depot, Inc. (3.29%), Starbucks (3.30%), and McDonald's (1.71%) rallied. Eli Lilly, which sells the obesity drug Zepbound, rose 1.57% on the day, becoming the first pharmaceutical company to surpass a market cap of $1 trillion (about 1,470 trillion won).