Wall Street rallies as traders bet on December rate cut

U.S. stock futures advanced Tuesday evening, signaling a continuation of the week’s rally as investors grow confident the Federal Reserve will cut interest rates next month.

Following a strong regular session that saw the Dow Jones Industrial Average surge 660 points, futures for the major indexes pushed higher. Dow futures rose 0.2%, while S&P 500 and Nasdaq 100 futures climbed 0.3% and 0.4%, respectively.

The market’s optimism is being fueled by a significant shift in expectations from the Federal Reserve. According to the CME FedWatch Tool, traders are now pricing in an 85% probability of a quarter-point rate cut in December. This sentiment was bolstered by recent economic data showing a slowdown in retail sales and consumer confidence.

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Meanwhile, tech stocks showed mixed results. Alphabet (GOOG) closed at a record high on reports of a potential chip deal with Meta (META), while Nvidia (NVDA) fell over 2.5%.

In other markets, gold prices rose to near $4,165 an ounce, benefiting from the weaker U.S. dollar and the prospect of lower interest rates.

In corporate news, Alibaba (BABA) reported a 34% revenue surge in its cloud and AI business, though its overall profit fell sharply as the company ramps up spending to compete in the artificial intelligence arena.