The Wall Street rally is gaining momentum as U.S. stocks edged higher again on Wednesday, fueled by fresh expectations of interest rate cuts from the Federal Reserve. The S&P 500 rose 0.3% in early trading, narrowing the gap to just 2.5% below its all-time high. Meanwhile, the Dow Jones Industrial Average added 94 points, or 0.2%, and the Nasdaq Composite also gained 0.3%, continuing a trend of gradual but steady upward movement.
Hewlett Packard and Wells Fargo Drive Gains
Tech and financials provided much of the strength. Hewlett Packard Enterprise (NYSE:HPE) jumped 4.1% after reporting quarterly earnings that beat analysts’ expectations. The surprise profit surge lifted investor confidence in the broader tech sector.
Meanwhile, Wells Fargo (NYSE:WFC) climbed 2.8% following the Federal Reserve’s decision to lift restrictions imposed in 2018 over the bank’s sales scandal. The move signaled renewed confidence in Wells Fargo’s compliance improvements and long-term growth strategy.
Weak Jobs Report Fuels Rate Cut Hopes
The bond market showed more pronounced movement as Treasury yields dropped following a disappointing employment report from ADP. The data revealed that private U.S. employers added just 37,000 jobs last month—well below the previous month’s 60,000 and economists’ expectations.
Although ADP data has historically been an imperfect predictor of the U.S. Labor Department’s official report, it nevertheless prompted a swift reaction from investors. Many now believe that the Federal Reserve will need to cut interest rates sooner rather than later to support an economy showing signs of cooling.
Economist Carl Weinberg of High Frequency Economics warned that the ADP report “may be the tip of an iceberg,” while acknowledging it could also be a statistical fluke. Regardless, traders are adjusting their positions in anticipation of Friday’s broader jobs data release.
Trump Pressures Fed for Faster Cuts
Former President Donald Trump took to Truth Social to lambast Fed Chair Jerome Powell, demanding quicker action: “Too Late Powell must now LOWER THE RATE. He is unbelievable!!! Europe has lowered NINE TIMES!”
While Trump continues to push for aggressive monetary easing, the Fed remains cautious. The central bank is balancing concerns about economic slowdown with inflationary risks—especially as Trump’s proposed tariffs and ongoing debt ceiling debates stir fresh uncertainty.
Treasury Yields Retreat
As rate cut expectations mounted, Treasury yields fell. The 10-year Treasury yield dropped to 4.40% from 4.46%, while the 2-year yield, a better indicator of Fed policy outlook, slipped to 3.91% from 3.96%. These moves reflect growing investor belief that borrowing costs may soon come down—boosting both corporate margins and consumer spending.
CrowdStrike Falls on Outlook Miss
Despite strong earnings, CrowdStrike (NASDAQ:CRWD) fell 7.9% after its revenue guidance missed expectations. The cybersecurity firm, recently in the spotlight after a tech outage involving Delta Air Lines (NYSE:DAL), reported solid profits but failed to impress on future growth projections.
Global Markets Mixed Amid Trade Uncertainty
Overseas, European and Asian markets generally rose, buoyed by hopes that renewed trade negotiations could ease tariff tensions. However, President Trump cast doubt on progress, saying of China’s President Xi Jinping: “VERY TOUGH, AND EXTREMELY HARD TO MAKE A DEAL WITH!!!”
One standout was South Korea’s Kospi, which surged 2.7% following the election of opposition leader Lee Jae-myung. His victory marks a major political shift, with expected boosts to domestic spending and U.S. trade talks.
Conclusion: Will the Wall Street Rally Hold?
The Wall Street rally appears durable for now, thanks to resilient corporate earnings and mounting speculation about Fed rate cuts. However, continued weakness in job growth and geopolitical uncertainty could cloud the outlook. Investors will be watching closely for Friday’s employment report and further signals from the Fed.
As always, Wall Street’s next move may depend less on what happens—and more on how traders interpret it.
Featured Image – Depositphotos
