U.S. equity markets have experienced an upward trend, with the Dow Jones Industrial Average aiming to break its longest streak of losses in over 40 years as investors anticipate insights into the Federal Reserve's policy easing program. The S&P 500 increased by 0.2%, reaching 6,060.1, while the Nasdaq climbed 0.1% to 20,137.2.
Notably, the Dow Jones Industrial Average rose by 0.4% to 43,628.6, despite recording its ninth consecutive close lower on Tuesday, marking the most extended period of declines since 1978. Technology and healthcare sectors saw gains during the intraday trading, whereas real estate sector faced declines. In the realm of economic indicators, November housing starts have dropped to an annual rate of 1.289 million, falling short of the anticipated 1.34 million rate based on a Bloomberg poll, after experiencing a decrease to 1.312 million in October.
Conversely, building permits rose by 6.1%, achieving a rate of 1.505 million in November, which surpassed the expected rate of 1.43 million, following a previous decrease to 1.419 million in October. The U.S. current account deficit for Q3 has widened to $310.95 billion, up from $275.03 billion in the previous quarter, compared to expectations of a $287.1 billion deficit from a Bloomberg survey.
Despite this, the U.S. Dollar index inched up by 0.2% to 107.15, nearing its peak level since October 2022. The Federal Open Market Committee is set to publish its post-meeting statement at 2:00 PM E.T., followed by Fed Chair Jerome Powell's press conference at 2:30 PM E.T. Current predictions from the CME Group's FedWatch tool indicate a 99% likelihood of a 25-basis point rate reduction, bringing the target range down to 4.25% to 4.50%.
Looking into next year, the predominant market expectation is for the Fed to implement two rate cuts, amidst encouraging macroeconomic data, which suggests a pause in the easing cycle that began with a 50 basis point cut in September. "While a rate cut is expected for December, the market's focus is on the Fed's economic outlook and any hints about a more cautious approach to monetary policy in 2025," stated a research note from D.A.
Davidson. Additionally, U.S. retail sales for November experienced the most significant surge since 2021, surpassing market projections. In response to the retail sales data, Morgan Stanley adjusted its Q4 consumption growth forecast to an inflation-adjusted rate of 2.6% quarter-over-quarter, reflecting a solid kickoff to the holiday spending season.
Last week, both the headline and core consumer price indexes for November aligned with expectations, while the producer price index data exceeded forecasts, raising concerns about the Fed pausing its easing cycle following its anticipated December 25 basis point cut. In the Treasury market, yields displayed a mixed performance, with the 10-year yield remaining steady at 4.39%, while the two-year yield declined by 1.7 basis points to 4.22%. In corporate developments, Microsoft purchased approximately 485,000 of Nvidia's Hopper artificial intelligence chips this year, eclipsing Meta's acquisition of 224,000 chips, Amazon's 196,000, and Alphabet's Google with 169,000, according to Financial Times, referencing technology consultancy Omdia.
As a result, Nvidia's shares surged by 3.7% during the intraday session, ranking among the top performers across the S&P 500, Nasdaq, and Dow. In other company news, Jabil's shares rose by over 9.7% intraday, leading gains in the S&P 500, following the company's optimistic outlook for fiscal 2025 core earnings and net revenue. On the commodities front, West Texas Intermediate crude oil futures increased by 1.1%, reaching $70.87 per barrel.
Gold prices dipped by 0.3% to $2,654.1 an ounce, while silver fell by 0.6% to $30.73 per ounce..