The three major U.S. stock indexes rose on expectations of a rate cut in December. As of 10:01 a.m. on the 21st local time, the Dow Jones Industrial Average was up 146.99 points, or 0.32%, at 45,899.25.
The Standard & Poor's (S&P) 500 rose 13.41 points, or 0.21%, to 6,552.17, and the Nasdaq composite added 3.47 points, or 0.02%, to 22,081.52.
As the likelihood of a benchmark rate cut grew and investor sentiment revived, John Williams, president of the New York Federal Reserve, said in a speech at the 100th anniversary conference of the Central Bank of Chile in Santiago, Chile, that there is "room to make additional adjustments to the target range for the federal funds rate (FFR) in the near future." According to the Chicago Mercantile Exchange (CME) FedWatch Tool, the probability of a rate cut surged from 39.1% to 70.9%.
Expectations for rate cuts also lifted stumbling AI stocks. Apple rose 1.07%, and Alphabet gained 3.12%. The S&P purchasing managers index (PMI) for November and the University of Michigan consumer sentiment index released that day also signaled positively. The manufacturing PMI was slightly below expectations, but the services PMI beat forecasts to reach a record high in four months. The University of Michigan consumer sentiment index came in at 51.0, higher than expected.
By sector, health care, communications, and consumer goods were strong, while technology and energy were weak. Apparel retailer Gap beat market expectations in its earnings release, sending its shares up more than 6%. In contrast, cryptocurrency asset manager Galaxy Digital fell nearly 5% on the back of a drop in Bitcoin prices.
European stocks were weak. The Euro Stoxx 50 fell 0.96% to 5,516.41, and the United Kingdom's FTSE 100 slipped 0.18%. International oil prices fell on expectations for an end to the war in Ukraine, with West Texas Intermediate (WTI) down 2.66% at $57.43 a barrel.