Mon Sep 23 23:13:14 UTC 2024: ## US Stocks Rebound on Rate Cut Hopes and Nvidia Surge

**New York, NY** – US stocks closed higher on Tuesday, erasing earlier losses fueled by strong conviction from swaps traders for deep interest-rate cuts this year and a surge in Nvidia shares.

The tech-heavy Nasdaq 100 index gained 0.5%, while the broader S&P 500 Index rose 0.2%. This reversal in sentiment came after a disappointing report on consumer confidence, which initially sent the markets lower. The Conference Board’s gauge of sentiment posted its biggest drop since August 2021, indicating concerns about the labor market.

However, the gloomy economic data also solidified swaps traders’ belief in the need for significant interest rate cuts. They increased their wagers on a policy easing of more than three-quarters of a point by year-end.

Nvidia, the leading chipmaker powering artificial intelligence, climbed over 4% after a report that its CEO had stopped selling shares. This move further boosted investor sentiment in the tech sector.

While the weak consumer confidence data highlighted potential economic concerns, BMO’s Ian Lyngen pointed out that “unless and until flagging confidence translates into lower consumer spending, the shift in sentiment won’t become a monetary policy influence.”

Despite the recent rate cut by the Federal Reserve, Governor Michelle Bowman remains concerned about inflationary risks and the lack of significant weakening in the labor market. However, other policymakers, like Chicago Fed President Austan Goolsbee, have advocated for a focus on jobs and believe that the Fed may need to cut rates “significantly.”

Meanwhile, investors are awaiting data on the Fed’s preferred price metric and US personal spending later this week for further insight into the future course of rate cuts.

The positive news from China’s economic stimulus package also boosted investor confidence. The stimulus package includes reduced reserve requirements for banks and at least 800 billion yuan ($114 billion) of liquidity support for stocks.

Overall, the stock market rebounded on a combination of positive factors, including strong conviction in interest rate cuts, a surge in Nvidia shares, and renewed optimism surrounding China’s economic stimulus efforts.

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