All three major Wall Street indexes reached new record highs at the close of trading on 22/9. The S&P 500 rose 0.4% to 6,693 points. The Nasdaq Composite gained 0.7%, closing at 22,788. The DJIA inched up 0.14% to 46,381 points.
The indexes rallied towards the end of the session following news of Nvidia's partnership with OpenAI, boosting investor optimism about the future of artificial intelligence. Nvidia's stock jumped 3.9% after the announcement of a 100 billion USD investment in OpenAI to build data centers.
Software company Oracle also rose 6% after announcing Clay Magouyrk and Mike Sicilia as co-CEOs, replacing Safra Catz. The stock has climbed 45% since the beginning of the month.
Similarly, Apple's stock added 4% due to investor optimism about new iPhone sales.
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Traders on the floor of the New York Stock Exchange (NYSE). Photo: Reuters |
Traders on the floor of the New York Stock Exchange (NYSE). Photo: Reuters
Another factor driving market optimism is the expectation that the US Federal Reserve (Fed) will cut interest rates two more times this year. "Unless something dramatically unexpected happens over the next three months, the market is basically telling you that the path of least resistance is up," said Sam Stovall, chief investment strategist at CFRA Research.
This week, the US will release the Personal Consumption Expenditures (PCE) price index, the Fed's preferred inflation gauge. Economists predict that inflation will remain subdued enough for the Fed to maintain its current monetary policy stance.
In the precious metals market, gold prices rose for the second consecutive session. Currently, each ounce is up 63 USD from the end of last week, reaching a new record high of 3,749 USD.
Expectations of further Fed rate cuts and safe-haven demand amid political instability are the main drivers of the precious metal's rally. The Russian Ministry of Defense stated that its forces have taken control of the settlement of Kalynivske in Ukraine's Dnipropetrovsk region.
Federal Reserve Governor Stephen Miran also said on 22/9 that the Fed should aggressively cut interest rates to mitigate risks to the economic outlook. The Fed lowered rates by 25 basis points (0.25%) last week, the first time this year, and signaled its readiness for further easing.
"Safe-haven demand persists due to geopolitical issues, including the Russia-Ukraine war. The Fed's rate cut last week, and the likelihood of more cuts later this year, are also supporting the market," explained Jim Wyckoff, senior analyst at Kitco Metals.
Ha Thu (according to Reuters, CNBC)
