Wall St ends up before holiday; investors optimistic Fed done raising rates

By Caroline Valetkevitch

NEW YORK (Reuters) -U.S. stocks ended higher on Wednesday on optimism that the Federal Reserve may be done raising interest rates and that the economy is still resilient.

Economic data showed the number of Americans filing new claims for unemployment benefits fell more than expected last week. Separately, U.S. consumers’ inflation expectations rose in a survey for a second straight month in November.

Tuesday’s minutes on the last Fed meeting showed a cautious approach toward monetary policy.

Still, stocks have risen sharply in recent weeks on the view that Fed is done hiking rates.

“Overall you have a solid backdrop to the market,” said Quincy Krosby, chief global strategist at LPL Financial (NASDAQ:) in Charlotte, North Carolina.

“The signals for the market, despite concerns over the economy and consumer spending, is that this market has sustainability in what is probably the most hospitable season for the market.”

She said stocks tend to rise just before the U.S. Thanksgiving holiday and also to rally heading into year-end. The market will be closed on Thursday for Thanksgiving.

According to preliminary data, the S&P 500 gained 18.41 points, or 0.41%, to end at 4,556.42 points, while the Nasdaq Composite gained 65.88 points, or 0.46%, to 14,265.86. The Dow Jones Industrial Average rose 182.27 points, or 0.52%, to 35,270.56.

Communication services led sector gains.

Among the day’s negatives, Nvidia (NASDAQ:)’s shares fell after the chip designer forecast overall fourth-quarter revenue above Wall Street targets, but warned U.S. export curbs could lead to a steep drop in sales in China.

Among other major movers, Deere (NYSE:) & Co shares were down after the farm equipment maker forecast 2024 profit below analysts’ estimates.