New York Stocks Open Higher on Hopes for December Rate Cut

(Seoul=Yonhap Infomax) Jeong Won Yoon – The three major U.S. stock indexes opened higher as expectations for a Federal Reserve rate cut in December gained momentum.

As of 10:01 a.m. local time on the 21st, the Dow Jones Industrial Average was up 146.99 points, or 0.32%, at 45,899.25 on the New York Stock Exchange. The S&P 500 rose 13.41 points, or 0.21%, to 6,552.17, while the Nasdaq Composite gained 3.47 points, or 0.02%, to 22,081.52.

Investor sentiment improved on growing expectations that the Federal Open Market Committee (FOMC) will lower its benchmark rate at the December meeting.

John Williams, President of the Federal Reserve Bank of New York, said in a speech at the Central Bank of Chile’s 100th anniversary event in Santiago, “I still see the possibility of further adjustments to the target range for the federal funds rate (FFR) in the near term to move policy closer to a neutral stance.”

According to the CME FedWatch Tool, following Williams’ remarks, the probability of a rate cut at next month’s FOMC meeting surged to 70.9%, up sharply from 39.1% the previous day.

Expectations for monetary easing also provided support to recently struggling artificial intelligence (AI) stocks, as looser policy is seen as both a boost for economic growth and a factor that could rationalize AI stock valuations.

Apple Inc. shares rose 1.07%, while Alphabet Inc. advanced 3.12%.

Key U.S. economic indicators released today included the November S&P Purchasing Managers’ Index (PMI) and the University of Michigan Consumer Sentiment Index.

The manufacturing PMI came in at 51.9, slightly below the consensus estimate of 52.0, while the services PMI beat expectations at 55.0, marking a four-month high. The University of Michigan Consumer Sentiment Index registered 51.0, above the forecast of 50.5.

John Campbell, head of the core asset team at Allspring Global Investments, said, “There is still an expectation that the rate cut cycle will continue, whether in December or early next year,” adding, “While there may be volatility around a December rate cut, the easing cycle is likely to persist into next year.”

By sector, healthcare, communications, and consumer goods outperformed, while technology and energy lagged.

Apparel retailer Gap Inc. surged more than 6% after reporting a 5% increase in same-store sales, beating market expectations.

Galaxy Digital, a cryptocurrency asset manager, fell nearly 5% as Bitcoin dropped into the $80,000 range.

Elastic, a digital analytics firm, tumbled over 14% after reporting sluggish cloud growth in its fiscal second-quarter results.

European stocks traded lower. The Euro Stoxx 50 index was down 0.96% at 5,516.41. The UK’s FTSE 100 slipped 0.18%, while France’s CAC 40 and Germany’s DAX declined 0.01% and 0.46%, respectively.

International oil prices also fell on hopes for an end to the war in Ukraine. At the same time, front-month West Texas Intermediate (WTI) crude for January 2026 delivery was down 2.66% at $57.43 per barrel.

jwyoon2@yna.co.kr

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