US stocks end up on tech rebound, rising rate cut bets

Wall Street stocks closed higher on Monday, extending Friday’s rally as increased odds that the US Federal Reserve will lower its Fed funds target rate in December helped investors look past concerns about inflated tech valuations.

- 

US indexes embarked on the holiday-shortened week with solid gains, with strength in the “Magnificent Seven” group of artificial-intelligence (AI)-related momentum stocks putting the tech-heavy Nasdaq out front.

A spate of economic reports, belatedly released after the recent six-week government shutdown, hinted at labor market weakness and stubbornly elevated inflation, which has bolstered investor optimism that the Fed will implement its third and final interest rate cut of 2025 at the conclusion of its December monetary meeting.

Dovish commentary from Fed Governor Christopher Waller, New York Fed President John Williams, and San Francisco Fed President Mary Daly lent some support to that optimism, although other policymakers voiced dissenting opinions.