The Nasdaq notched a record high close on Monday, lifted by a rally in Broadcom, while the S&P 500 also gained as investors bet the Federal Reserve will soon lower borrowing costs to shore up economic growth.
Investors expect multiple interest rate cuts this year after a troubling nonfarm payrolls report on Friday added to concerns about a weakening US job market. The report, which had dragged down Wall Street in the previous session, has stoked fears of a potential slowdown in the world’s biggest economy.
Traders have fully priced in at least a 25 basis point interest rate cut when the Fed wraps up its two-day policy meeting on September 17, with interest rate futures reflecting a 10 percent chance of a 50 basis point cut, according to CME Group’s FedWatch tool.
“The focus is on next Wednesday’s Fed rate cut. The market is greedy. It’s already discounted 25 basis points. Now, if people are buying because they expect 50, well, that’s not going to happen,” warned Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma.
Numerous brokerages have revised calls for Fed interest rate cuts. Barclays now anticipates three cuts of 25 bps each in 2025 compared with two earlier, while Standard Chartered expects a 50-bps trim in September – double its earlier projection.
Broadcom climbed 3.2 percent, extending its rally since the chipmaker said last Thursday it expects sharp artificial intelligence-related revenue growth. Its market capitalization has reached $1.6 trillion, and it is Wall Street’s seventh most valuable company.
The S&P 500 climbed 0.21 percent to end at 6,495.15 points.
The Nasdaq gained 0.45 percent to 21,798.70 points, its highest close ever. The Dow Jones Industrial Average rose 0.25 percent to 45,514.95 points.
The S&P 500 is up about 10 percent so far in 2025, and the Nasdaq has climbed about 13 percent.
