The S&P 500 rose 0.3%, leaving it less than 0.6% from its all-time high. The Nasdaq Composite gained 0.7%, and the Dow Jones Industrial Average advanced 44 points, or 0.1%. The 30-stock Dow hit a new all-time high.
Microsoft rose more than 1% after the tech giant raised its quarterly dividend by 10.7% to 83 cents per share. The company also approved a $60 billion share buyback program.
Intel shares are extending their gains by 2.3% after the company announced it plans to spin off its foundry business into a subsidiary. The Biden administration also provided the company with up to $3 billion in funding through the CHIPS Act.
Fresh data from the US economy
The latest retail sales data indicated solid consumer health ahead of the Federal Reserve’s policy meeting, which began Tuesday. Retail sales rose 0.1% in August, compared with economists’ estimate for a 0.2% drop, according to Dow Jones. Excluding autos, the increase was also 0.1%, slightly below the consensus forecast of 0.2%.
Wall Street is awaiting the Federal Reserve’s long-awaited rate cut, a move that could help boost corporate earnings growth after a period of high borrowing costs and elevated inflation. The Fed began its aggressive rate-hiking campaign in March 2022.
While investors are expecting a cut on Wednesday, the market is divided on the size of the possible reduction. Traders are currently pricing in a 67% chance that the central bank will cut rates by 50 basis points, according to the CME Group’s Fed Watch tool. This is up from Friday’s 47% probability. One basis point is equal to 0.01%.
While a 50 basis point cut is not out of the question, the chief global strategist believes the Fed should take a more cautious approach and cut rates by 25 basis points. Additional 25 basis point cuts are forecast in November and December.
Source: Ambito
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