Wall Street experienced a rally driven by positive news regarding artificial intelligence and potential interest rate cuts. The S&P 500 climbed significantly, nearing its all-time high, with the Dow Jones Industrial Average and Nasdaq composite also showing substantial gains.
The primary catalyst for the AI optimism was a strong profit report from Nvidia, exceeding analyst expectations for both current performance and future revenue. This report helped to alleviate concerns that AI-focused stocks had become overvalued, akin to the dot-com bubble.
Nvidia's performance bolstered confidence in other AI-related stocks, such as Palantir Technologies and Oracle, which also saw increases. Simultaneously, hopes for further interest rate cuts by the Federal Reserve were boosted by a mixed U.S.
jobs report. While hiring figures in September were stronger than anticipated, suggesting economic resilience, a slight increase in the unemployment rate provided a rationale for the Fed to consider lowering rates.
This development improved the market's perception of the likelihood of a rate cut in December, a factor crucial for stock market performance that has been buoyed by expectations of continued rate reductions. Adding to the positive sentiment, Walmart reported a standout quarter with strong sales and profits, exceeding expectations and raising its financial outlook.
This performance was attributed to its appeal to consumers concerned about the economy and prices, positioning the retailer for a successful holiday season. In response to these developments, bond yields decreased, and stock markets globally also experienced rallies.
