All three major U.S. equity benchmarks — the S&P 500, Nasdaq 100, and Dow Jones — surged to fresh record highs on Thursday, as investors piled into risk assets on growing bets that interest rates will soon fall.
The rally came despite gloomy economic data: U.S. inflation accelerated to 2.9% year-over-year in August, while weekly jobless claims spiked to 263,000 – their highest level since October 2021.
Yet, investors brushed aside the stagflation concerns, wagering that the Federal Reserve will prioritize stabilizing a weakening labor market over containing price pressures.
By midday in New York, the S&P 500 advanced 0.8% to 6,584, the Nasdaq 100 climbed 0.7% to break above the 24,000 mark, and the Dow Jones Industrial Average jumped 1.3% to 46,080.
Speculators fully price in a 25-basis-point rate cut next week …