Wall Street Advances Amid Anticipation of Federal Reserve Rate Cut

U.S. stock markets continued their upward trajectory on Thursday, with major indices reaching record levels. The S&P 500 increased by 0.8%, marking its third consecutive all-time high. The Dow Jones Industrial Average rose by 617 points, or 1.4%, while the Nasdaq Composite gained 0.7%, both setting new records.

The bond market saw a decline in Treasury yields following the release of economic reports. One report indicated a rise in unemployment benefit applications last week, suggesting a potential uptick in layoffs. Another report showed consumer prices in August were 2.9% higher than a year earlier, slightly above the Federal Reserve's 2% target but in line with economists' expectations.

Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management, commented, "Right now, inflation is a key subplot, but the labor market is still the main story."

In the stock market, sectors that typically benefit from lower interest rates performed well. Builders FirstSource, a supplier of building materials, saw its stock climb 4.5%. Health care company Centene's shares jumped 9% after reporting business results through August that aligned with its profit forecast for the year. Opendoor Technologies' stock soared 79.5% following the appointment of Shopify's chief operating officer, Kaz Nejatian, as its new CEO and a $40 million investment by one of its founders.

Warner Bros. Discovery's shares increased by 28.9% amid reports of a potential acquisition bid by Paramount Skydance. Conversely, Oracle's stock fell 6.2%, partially offsetting its significant gain from the previous day.

In international markets, European indices edged higher after the European Central Bank maintained its current interest rates. France's CAC 40 rose 0.8%, and Germany's DAX increased by 0.3%. In Asia, Shanghai's stock market jumped 1.7%, while Hong Kong's declined by 0.4%.

The yield on the 10-year Treasury note eased to 4.02% from 4.04% late Wednesday.