U.S. Stocks Rise on Hopes of Federal Reserve Rate Cut

U.S. stock markets climbed on Wednesday, fueled by expectations that the Federal Reserve will lower interest rates in its upcoming meeting. The S&P 500 rose 0.2%, while the Dow Jones Industrial Average gained about 0.5%. Meanwhile, the Nasdaq 100, heavy on technology stocks, slipped less than 0.1%.

Markets rebounded from early losses as U.S. Treasury yields fell, following a weaker-than-expected ADP jobs report for November. The report strengthened expectations of potential monetary easing in the Fed’s December 9–10 meeting. The yield on the 10-year U.S. Treasury note dropped by two basis points to 4.07%.

Semiconductor stocks played a key role in lifting the market. Microchip Technology surged over 7% after reporting quarterly earnings above estimates, while Marvell Technology rose more than 3% following stronger-than-expected revenue.

Stocks initially fell amid concerns over the labor market, as the ADP report showed an unexpected decline of 32,000 jobs—the largest drop in more than two and a half years. However, markets recovered after the ISM Services Purchasing Managers Index showed U.S. service sector activity hitting a nine-month high at 52.6 points, with easing price pressures in the sector.

In the housing market, U.S. mortgage applications fell 1.4% for the week ending November 28. The home purchase index rose 2.5%, while the refinancing index dropped 4.4%. The average 30-year fixed mortgage rate fell eight basis points to 6.32% from 6.40% the previous week.

Meanwhile, U.S. President Donald Trump announced plans to reveal his choice for a new Federal Reserve Chair in early 2026. Speculation over leadership changes has raised questions about the Fed’s independence and its stance on potential interest rate cuts.

Markets are now pricing in a 98% probability that the Fed will lower rates by 25 basis points at its next meeting, reflecting strong investor confidence in continued monetary easing.

Overall, U.S. stocks found support from anticipated rate cuts and a strong technology sector, despite ongoing concerns over labor market weakness and broader economic pressures.