NEW YORK, Oct 1 (Bernama-Xinhua) -- US stocks closed higher on Monday, wrapping up September with a strong rally driven by optimism surrounding the first interest rate cuts in years and growing enthusiasm for artificial intelligence advancements.
The market's bullish sentiment was supported by expectations of continued economic recovery and innovation in the tech sector, reported Xinhua.
The Dow Jones Industrial Average rose 17.15 points, or 0.04 per cent, to 42,330.15. The S&P 500 added 24.31 points, or 0.42 per cent, to 5,762.48, which is its best September return since 2019. The Nasdaq Composite Index increased 69.58 points, or 0.38 per cent, to 18,189.17.
Nine of the 11 primary S&P 500 sectors ended in green, with energy and communication services leading the gainers by adding 0.83 per cent and 0.79 per cent, respectively. Meanwhile, materials and consumer discretionary led the laggards by losing 0.60 per cent and 0.28 per cent, respectively.
The S&P 500 dropped but then recovered losses during the trading session following Federal Reserve Chair Jerome Powell's remarks at a conference in Nashville, Tennessee on Monday. "We're looking at it as a process that will play out over some time," Powell said during a Q&A session, addressing the Fed's approach to interest rate cuts, "not something that we need to go fast on. It'll depend on the data, the speed at which we actually go."
Powell stressed that the central bank's focus is on maintaining a stable and robust economy, as well as a strong job market, rather than intervening to rescue an economy in distress or to avert a potential recession. "If the economy performs as expected, that would mean two more cuts this year," both by a quarter-point, he added.
Powell's comments dampened market expectations of another big cut of benchmark interest rate by the Fed.
Traders are currently factoring in a 37.1 per cent likelihood that the Fed will lower rates by another 50 basis points in its meeting on Nov. 7 much lower than 62.9 per cent in the previous session, according to CME Group's FedWatch tool.
---BERNAMA-XINHUA
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