(Nov 26): US stocks advanced on Wednesday as expectations for an interest-rate cut at the Federal Reserve’s next meeting helped fuel gains before the Thanksgiving break.
The S&P 500 Index rose 0.4% at 10:08am, putting the benchmark on track for a fourth-straight day of gains. The tech-heavy Nasdaq 100 Index gained 0.4%.
“Stocks are celebrating the likelihood of a December rate cut, as it’s becoming clear that the labour market is the priority for the Federal Reserve,” said Paul Stanley, chief investment officer at Granite Bay Wealth Management. “Another rate cut would help to protect against any further cooling of the job market.”
November has been a jittery month for the market, with both the S&P 500 and Nasdaq 100 moving away from their last record highs in late October. Both indices remain on pace to break a streak of monthly gains as the artificial intelligence sector comes under scrutiny, with a perception of stretched valuations causing some uncertainty.
However, stocks are regaining momentum as dovish remarks from Fed policymakers are boosting hopes for monetary easing next month. Adding to that optimism is Kevin Hassett — a close ally of President Donald Trump — appearing as the frontrunner to be the central bank’s next chair. Hassett, the director of the White House National Economic Council, is seen as someone who would bring the president’s approach to interest-rate cutting to the Fed.
“It’s becoming more clear that the stock market declines seen over most of November were simply a pullback after an extremely strong run in October and September,” Stanley said, adding that he expects “mild volatility” in stocks between now and the end of the year as investors attempt to price in what 2026 will look like for earnings and the economic picture.
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Doug Beath, global equity strategist at Wells Fargo Investment Institute, believes a rate cut in December is likely. Beath points to Fed chair Jerome Powell signalling that a soft labour market is a greater concern than inflation, along with a “deluge” of government data since in recent weeks not changing those trends.
“We think many investors are missing the main point that the trend of short-term interest rates is lower through 2026, regardless of what happens on December 10th — and that is positive for equity markets,” Beath said.
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The release of economic data — both delayed and fresh — continued on Wednesday morning, with traders holding firm on their high hopes for a December rate cut. Orders of durable goods for September rose in line with expectations, while new applications for unemployment benefits fell last week to the lowest level since mid-April.
In terms of stock moves, Dell Technologies Inc climbed after raising its full-year forecast, with analysts noting growth in AI server shipments as a highlight. Petco Health & Wellness Co surged after boosting its annual earnings guidance, signalling progress in a turnaround.
Deere & Co slumped as the tractor maker’s forecast for 2026 net income came in below consensus estimates. Nutanix Inc tumbled after the cloud-platform company cut its revenue forecast.
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