Stocks Rise as Fed Rate-Cut Expectations Intensify

The S&P 500 and Nasdaq reached near-record territory on Thursday because investors became more optimistic about potential Federal Reserve interest rate reductions. The market gained momentum after reports emerged that President Donald Trump was planning to replace Fed Chair Jerome Powell before fall which strengthened expectations about upcoming central bank actions.

Market participants now predict a 25% chance of a July rate cut according to CME Group’s FedWatch tool which showed a 12.5% probability the week before. The S&P 500 operated at 0.5% below its peak while the Nasdaq stayed 0.7% below its record because of Middle Eastern geopolitical developments. The Nasdaq 100 achieved its highest point during the trading day.

Economic data provided mixed signals. The U.S. Commerce Department's final estimate showed first-quarter GDP decreased by 0.5% which exceeded the initial prediction of a 0.2% decline. The combination of economic contraction with weak inflation data and Federal Reserve political pressure has strengthened expectations for monetary policy relaxation.

The interest rate environment together with worldwide events maintains both market volatility and investment possibilities in equities. The Fed's next moves remain under scrutiny from investors because monetary policy debates continue to heat up in Washington.