Wall Street Soars To Records On Fed Rate Bets: What's Moving Markets Thursday?

All three major U.S. equity benchmarks — the S&P 500, Nasdaq 100, and Dow Jones — surged to fresh record highs on Thursday, as investors piled into risk assets on growing bets that interest rates will soon fall.

The rally came despite gloomy economic data: U.S. inflation accelerated to 2.9% year-over-year in August, while weekly jobless claims spiked to 263,000 – their highest level since October 2021.

Yet, investors brushed aside the stagflation concerns, wagering that the Federal Reserve will prioritize stabilizing a weakening labor market over containing price pressures.

By midday in New York, the S&P 500 advanced 0.8% to 6,584, the Nasdaq 100 climbed 0.7% to break above the 24,000 mark, and the Dow Jones Industrial Average jumped 1.3% to 46,080.

Speculators fully price in a 25-basis-point rate cut next week and see over a 90% chance of another in October, according to the CME FedWatch tool.

CFTC-regulated betting platform Kalshi assigns a 63% chance that another cut will be delivered in December 2025.

All 11 S&P sectors traded higher, led by cyclical groups such as consumer discretionary, materials, and financials.

The shift toward a lower-rate outlook also rippled through bonds, sending Treasury yields to five-month lows. The 10-year benchmark yield fell to 4%, its lowest level since early April.

The risk-on mood briefly halted gold's record-setting run, with the metal slipping 0.2% to $3,630. Silver extended gains, climbing 1.4% to $41.70 an ounce, while crude oil dropped 2%. Bitcoin (CRYPTO: BTC) edged 0.3% higher to $114,000.

Thursday’s Performance In Major US Indices, ETFs

According to Benzinga Pro data:

• The Vanguard S&P 500 ETF (NYSE:VOO) soared 0.8% to $604.49.
• The SPDR Dow Jones Industrial Average (NYSE:DIA) rose 1.2% to $461.58.
• The tech-heavy Invesco QQQ Trust Series (NASDAQ:QQQ) edged 0.7% higher to $584.72.
• The iShares Russell 2000 ETF (NYSE:IWM) rose 1.5% to $239.94.
• The Consumer Discretionary Select Sector SPDR Fund (NYSE:XLY) outperformed, up 1.3%; the Energy Select Sector SPDR Fund (NYSE:XLE) lagged, up 0.1%.

S&P 500’s Top 5 Movers

S&P 500’s Top 5 Losers

Read Next:

• Prices Are Rising, Jobs Are Gone — Can The Fed Stop A Stagflation Spiral?

Image created using artificial intelligence via Midjourney.