US Stocks Extend Winning Streak on Rate Cut Hopes and Strong Data

The Dow Jones Industrial Average gained 314.67 points, or 0.7%, closing at 47,427.12 with 21 of its 30 components advancing. The S&P 500 rose 0.7% to 6,812.61, while the Nasdaq Composite added 0.8% to 23,214.69, driven by strong gains in artificial intelligence and technology stocks.

AppLovin Corp. (NASDAQ: APP) led the tech advance, climbing 5.5% on continued momentum in AI-driven advertising platforms. The Technology (XLK) and Utilities (XLU) sectors each rose 1.3%, while Materials (XLB) and Consumer Staples (XLP) gained 1.2% and 1.0%, respectively.

Market volatility eased as the CBOE VIX Index dropped 7.4% to 17.19, signaling calmer investor sentiment.

Rate Cut Optimism Builds

Investor focus remained on the Fed’s December meeting following fresh signals from Washington. Reports from Bloomberg and CNBC suggest that Kevin Hassett, head of the White House National Economic Council, is emerging as a frontrunner to replace Jerome Powell as Fed Chair.

Hassett is known for favoring a low-rate policy stance. Analysts at Bank of America expect the Fed funds rate could drop below 3% under his leadership.

Recent comments from San Francisco Fed President Mary Daly and New York Fed President John Williams have reinforced expectations of a December rate cut, citing softening labor market conditions. According to the CME FedWatch Tool, traders now price in an 85% probability of a 25-basis-point cut, up sharply from 42% a week ago.

Economic Data Remains Resilient

Fresh data painted a mixed but overall positive picture of the US economy.

Initial jobless claims fell by 6,000 to 216,000, better than expectations, while continuing claims edged higher to 1.96 million, suggesting a still-stable job market.
Durable goods orders rose 0.5% in September, missing forecasts but marking a second straight monthly gain after a revised 3% increase in August.
Core capital goods orders—a proxy for business investment—rose 0.9%, signaling steady corporate spending momentum.
Crude oil inventories climbed 2.8 million barrels, easing supply concerns.

Market Outlook

With inflation slowing and policymakers signaling support for further easing, traders remain optimistic the Fed will pivot to a more accommodative stance before year-end.

“The combination of cooling inflation, stable employment, and dovish Fed signals is giving equities fresh legs,” said one strategist. “If rate cuts materialize in December, it could fuel another leg of this rally into 2026.”

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