US Stock Market Today: Rate Cut Bets Drive Market, S&P 500 Near Record Highs, Investors Eye Dovish Fed Policy

Investor sentiment is still positive, as there is an expectation that the US Federal Reserve can take a more dovish position towards the end of the year. After recent indicators of weakness in the labor market and changes in the Federal Reserve’s strategies, traders are placing wagers on a cut in borrowing rates. A Reuters survey shows investors anticipate a Fed rate cut of about 60 basis points by December.

This anticipation comes after the earnings season’s superior-than-forecast results, which alluded to fears that the economy was slacking. Investors have been adjusting positions, adding to equity exposure in emerging markets and utilities, and decreasing involvement in healthcare and real estate. Amid the panic regarding stagflation, the S&P 500 is at or close to record highs, as mega-cap stocks, such as Apple, are performing strongly.