Wall Street rises on hopes for rate cuts as Dow ticks toward another record

NEW YORK (AP) — Wall Street is ticking higher Thursday following its big rally the day before on excitement that several cuts to interest rates may indeed be coming next year.

The S&P 500 was 0.4% higher in midday trading and within 1.4% of its all-time high set early last year. The Dow Jones Industrial Average was up 114 points, or 0.3%, and on track to set a record for a second straight day, as of noon Eastern time. The Nasdaq composite was 0.3% higher.

Moderna jumped 13.8% after it reported encouraging data from a study of its treatment for highrisk melanoma that's used with Merck's Keytruda. That helped offset a 5.5% slump for Adobe, which gave a forecast for 2024 revenue that fell short of analysts' expectations.

Stocks broadly have been shooting higher since October on hopes that inflation has cooled enough for the Federal Reserve to not only stop its market-rattling hikes to interest rates but to even begin considering cutting them. Those hopes strengthened Wednesday after the Fed held its main interest rate steady and said the federal funds rate is likely already at or near its peak.

More importantly, the Fed also released projections showing its median official expects the federal funds rate to fall next year by more than earlier expected. Wall Street loves lower interest rates because they can goose prices for investments and relax the pressure on the economy and financial system.

Other central banks are also meeting this week, and hopes are rising that the pivot toward easier conditions for financial markets and the economy may be global. Both the European Central Bank and Bank of England on Thursday decided to keep their main interest rates unchanged, though each also gave signals that cuts are not imminent.

Treasury yields sank further in the bond market as traders bet on a series of cuts to U.S. interest rates coming in 2024.

The yield on the 10-year Treasury fell to 3.90% from 4.03% late Wednesday. It was above 5% in October, at its highest level since 2007, and the sharp drop since then has given the stock market a big boost.

Owners of office parks, hotels and other real estate, which benefit from lower interest rates, were some of Thursday's bigger winners.

Brodie Johnson • Times-Herald Forrest City Fire Department Battalion Chief Zakk Jumper, who is also the director of St. Francis County Office of Emergency Services, enters reports into the fire department’s computer system. Each time the agency responds to a call, firemen document the incident for future reference.