Nasdaq Soars to Record High as Wall Street Awaits Fed Decision
The Nasdaq composite soared to a record high on Monday, December 16, 2024, while other major U.S. stock indexes showed mixed movements. Investors are focused on the Federal Reserve’s upcoming decision on interest rates, which could shape Wall Street’s trajectory for 2025.
The S&P 500 gained 0.4% after a minor dip last week, while the Dow Jones Industrial Average fell by 110 points, or 0.3%. Broadcom played a significant role in the S&P 500’s rise, surging 11.2% due to its promising advancements in artificial intelligence technology.
Wednesday’s Federal Reserve meeting is expected to bring a third consecutive interest rate cut, aimed at bolstering the job market and sustaining economic momentum. Inflation has been largely tamed, nearing the Fed’s 2% target, but lingering concerns could influence the pace of further rate cuts in 2025.
Traders are eagerly awaiting projections from Fed officials, including economic forecasts for next year. These updates will be shared after the meeting, with Fed Chair Jerome Powell scheduled to address the media in a press conference.
Despite optimism, challenges remain. Inflation pressures, partly due to potential tariff changes by President-elect Donald Trump, have sparked debate about how aggressively the Fed should proceed with cuts. Goldman Sachs’ David Mericle, for instance, recently revised his forecast, suggesting the Fed might pause rate reductions in January.
The market’s resilience in 2024 has been remarkable, with the S&P 500 achieving 57 all-time highs this year. Strong economic growth, coupled with rate adjustments, has helped stocks rally despite initial fears of a prolonged slowdown.
Bitcoin’s meteoric rise added another layer of excitement to the day. The cryptocurrency briefly surpassed $107,700 before settling below $106,000. MicroStrategy, which has heavily invested in bitcoin, saw its stock climb during the day but closed with a slight dip. The company’s stock has skyrocketed over 600% this year, aligning with bitcoin’s performance.
As investors brace for the Fed’s decision, optimism remains high, but caution prevails. The outcome of this meeting could determine the pace of economic recovery and market performance in the months to come.
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