Rate-cut expectations rise after remarks from a key Federal Reserve official.
Wall Street posted a solid rebound on Friday after comments from New York Federal Reserve President John Williams lifted expectations for another rate cut this year. The Dow Jones rose 1.1 percent, the S&P 500 gained 0.98 percent, and the Nasdaq Composite advanced 0.8 percent. Williams noted that policy remains moderately restrictive and suggested there is room for further adjustment, which traders viewed as a signal that the December meeting may bring another cut.
Market participants quickly repriced rate expectations. Fed funds futures now imply more than a 70 percent probability of a quarter point cut, jumping from less than 40 percent the previous day. Rate sensitive names such as Home Depot, Starbucks, and McDonald’s helped lead the recovery as investors positioned for a more supportive monetary backdrop. Hopes are rising that easier policy can help stabilize a slowing economy and bolster high tech valuations.
The advance followed a volatile session on Thursday, when stocks reversed sharply after an early surge tied to Nvidia’s strong earnings faded into the close. Despite Friday’s gains, all major averages still ended the week lower, with the S&P 500 and Dow down about 2 percent and the Nasdaq off nearly 2.7 percent.
📊 Market Wrap
🧠 Analyst Notes
💬 Market Highlights
Elon Musk Targets AI Chip Production Dominance
Elon Musk said Tesla and xAI aim to release a new AI chip every 12 months and plan to produce chips in volumes exceeding the combined output of Nvidia, AMD, Intel, and Broadcom. Tesla’s current AI4 chips are already deployed in vehicles and data centers, while AI5 is nearing production and AI6 remains in development. Musk highlighted these chips as core foundations for safer FSD capabilities and future Optimus humanoids that could deliver advanced medical services.
Trump Prepares New Policy Framework to Cut Healthcare Costs
President Donald Trump is expected to introduce the Healthcare Price Cuts Act to counter rising Affordable Care Act related costs as subsidies roll off for 22 million Americans. The proposal includes measures to prevent sudden premium spikes, eliminate zero premium subsidies viewed as vulnerable to misuse, and incentivize lower premiums through Health Savings Account linked deposit programs. The policy could impact major ACA insurers such as UnitedHealth, CVS/Aetna, and Centene.
Salesforce CEO Praises Gemini 3, Calls AI Leap “Insane”
Salesforce CEO Marc Benioff endorsed Alphabet’s new Gemini 3 model after testing it and said the improvements were so significant that he would not return to Microsoft’s competing AI tools. Benioff highlighted major gains in reasoning, speed, and multimodal capabilities, including image and video support. His comments signal a competitive shift in the AI landscape, although independent benchmarking will be needed to validate the technical claims.
📅 Earnings Watch
Markets remain sensitive to central bank signals and macro data releases, with traders watching how expectations for a December rate cut shape sentiment across equities and risk assets.
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