After Federal Reserve Chair Jerome Powell stated that the central bank might slow the pace of its interest rate hikes as early as December, Wall Street closed the day considerably higher.
When Powell's written remarks for the Brookings Institution think tank in Washington were made public, the S&P 500 surged and ended above its 200 day moving average for the first time since April.
Powell also issued a warning that the fight against inflation was far from done and that important questions remained unanswered, including as how far and how long rates will need to increase.
"The market has been anticipating that explanation over the duration and intensity of Fed tightening with baited breath. In addition, anything that supports the notion that the Fed is becoming less hawkish is seen as encouraging for equities, at least in the near term "Chuck Carlson, CEO of Horizon Investment Services in Hammond, Indiana, made the statement.
The benchmark S&P 500 index (.SPX) experienced its second consecutive month of gains thanks to bets that the Fed will scale back the amount of its rate hikes and recent data suggesting a minor cooling in inflation.
The probability that the Fed will increase interest rates by 50 basis points at its December meeting increased from 65% to 75%, according to the CME FedWatch Tool, after Powell's remarks were made public. Currently, a 25% possibility of a 75 basis point increase is indicated by the FedWatch programme.
Apple (AAPL.O) increased by 4.9%, Microsoft (MSFT.O) increased by 6.2%, and Nvidia (NVDA.O) increased by more than 8%.
Shares of Tesla Inc. (TSLA.O) increased 7.7% after China Merchants Bank International reported that price reductions and incentives offered on Tesla's Model 3 and Model Y helped improve sales in China in November.
The S&P 500 climbed 3.09% to end the session at 4,079.97 points.
The Nasdaq gained 4.41% to 11,468.00 points, while Dow Jones Industrial Average rose 2.18% to 34,589.24 points.
The Philadelphia Semiconductor index (.SOX) surged 5.85%, trimming its loss in 2022 to about 28%.
Volume on U.S. exchanges was heavy, with 15.0 billion shares traded, compared to an average of 11.1 billion shares over the previous 20 sessions.
For November, the S&P 500 climbed 5.4%, the Dow added 5.7% and the Nasdaq increased 4.4%.
In November, private employment expanded by 127,000, undershooting estimates of 200,000 jobs, according to an ADP National Employment report, indicating that demand for labour was slowing due to rising interest rates.
According to Keith Buchanan, a portfolio manager at Globalt in Atlanta, "the ADP employment number not meeting expectations fits into the narrative that the Fed will have leeway and start slowing down its rate hikes, and that obviously supports interest rate sensitive assets."
The eagerly anticipated nonfarm payrolls data from the Labor Department is due on Friday. According to a survey, there were 10.334 million job opportunities in the United States in October, down from 10.687 million the month before.
Another reading showed the U.S. economy rebounded more strongly than initially thought in the third quarter.
The S&P 500 remains down about 14% so far in 2022, while the Nasdaq index (.IXIC) has lost about 27%.
Biogen Inc (BIIB.O) jumped 4.7% after its experimental Alzheimer's drug slowed cognitive decline in a closely watched trial.
Advancing issues outnumbered falling ones within the S&P 500 (.AD.SPX) by a 24.1-to-one ratio.
The S&P 500 posted 24 new highs and 1 new low; the Nasdaq recorded 117 new highs and 167 new lows.
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