The Nasdaq inched up 31.24 points (0.1%) to 21,713.14 and the S&P 500 rose 20.82 points (0.3%) to 6,466.58, while the narrower Dow posted a more significant gain, jumping 463.66 points (1%) to 44,922.27.
The blue-chip index saw strong gains, supported by notable advances in UnitedHealth, Nike, Sherwin-Williams, and Merck. Optimism over a potential Federal Reserve interest rate cut, following consumer price inflation data that matched estimates, boosted early market sentiment. The Fed is widely expected to lower rates by at least 25 basis points next month, with some calls for a larger 50-point cut due to weak jobs data.
Despite the early rally, buying momentum eased later in the session amid a lack of fresh U.S. economic data. Traders are now turning their attention to upcoming reports on producer prices, retail sales, industrial production, and consumer sentiment. These releases are expected to provide further clues on the Fed’s next policy move.
Housing stocks turned in some of the market's best performances, with the Philadelphia Housing Sector Index surging by 3.7% to its best closing level in eight months. Biotechnology stocks are substantially strong , as reflected by the 3.0% jump by the NYSE Arca Biotechnology Index. The gain lifted the index to a five-month closing high. Airline, pharmaceutical and computer hardware stocks too turned out to be considerably strong while brokerage and software stocks showed notable moves to the downside.
Asia-Pacific stocks moved mostly higher. Japan's Nikkei 225 Index jumped by 1.3%, while Hong Kong's Hang Seng Index surged by 2.6%. The major European markets also moved to the upside on the day. While the U.K.'s FTSE 100 Index edged up by 0.2%, the German DAX Index and the French CAC 40 Index both advanced by 0.7%.
In the bond market, treasuries saw notable strength following the modest pullback seen in the previous session. Subsequently, the yield on the benchmark ten-year note which moves opposite of its price, slid 5.5 bps to 4.23%.