NEW YORK, Nov 22 (Reuters) – U.S. stocks surged on Wednesday, propelled by strong earnings reports and growing optimism about a potential Federal Reserve pivot, as investors positioned themselves ahead of the Thanksgiving holiday.
The Dow Jones Industrial Average climbed 330.99 points, or 0.97%, to 34,347.76, the S&P 500 gained 1.03% to 4,559.34,and the Nasdaq Composite rose 1.37% to 14,250.98. All three major indexes posted their largest daily percentage gains in over a month.
Investor sentiment was boosted by better-than-expected earnings from companies like Best Buy and Hewlett Packard Enterprise, signaling resilience in consumer spending and corporate performance. Simultaneously,minutes from the Federal Reserve’s latest policy meeting indicated a willingness to consider slowing the pace of interest rate hikes,fueling speculation that the central bank may be nearing the end of its tightening cycle. This shift in expectations sent bond yields lower and provided further support for equities.
“The market is interpreting the Fed minutes as possibly dovish, suggesting a slower pace of rate hikes,” said Robert Pavlik, senior portfolio manager at Dakota Wealth Management. “Combined with solid earnings, this is creating a positive feedback loop.”
The energy sector lagged, falling 0.8%, as oil prices declined amid concerns about global demand. Though, technology stocks led the gains, with companies like Apple and Microsoft contributing considerably to the Nasdaq’s advance.
Trading volume is expected to be lighter than usual on Wednesday and Friday due to the Thanksgiving holiday. Investors will be closely watching economic data releases next week, including the Personal Consumption Expenditures (PCE) price index, for further clues about the Fed’s future policy path.
