Wall Street Rallies as Dovish Fed Signals Fuel Risk Appetite; Nasdaq Books Best Day Since May
U.S. equities surged into the close, led by a tech-powered rally after Federal Reserve officials signaled support for a December rate cut, sharpening risk appetite and propelling major benchmarks to multi-week highs.
Dovish Fed rhetoric ignites risk appetite Comments from San Francisco Fed President Mary Daly backing a cut next month, alongside similar remarks earlier from Governor Christopher Waller, catalyzed a broad-based bid across growth shares. Traders leaned into the soft-landing narrative, rotating into high-beta technology and semiconductors amid expectations that monetary policy may soon pivot toward easing. The repricing of the rates path spurred short-covering and fresh inflows into mega-cap tech, with market positioning skewed toward risk-on exposure by the bell.
Tech and semiconductors power gains Semiconductor and AI-adjacent names led the tape. Broadcom jumped 11.10%, with notable strength in Western Digital (+8.43%), Micron (+7.99%), AMD (+5.53%), and Lam Research (+5.42%). Mega-cap growth also caught a strong bid: Alphabet rose 6.28% and Tesla advanced 6.82%. Fintech and crypto-linked equities outperformed as liquidity chased beta—Robinhood gained 7.15%, SoFi climbed 8.63%, while Grayscale Bitcoin Trust added 5.47% and MicroStrategy rose 5.01%. Chinese ADRs participated, with Alibaba up 5.13%; Shopify added 5.12%. Nebius NV rallied 10.35%.
Index performance at the close – Dow Jones Industrial Average: +0.44% to 46,448.27 (+202.86 points) – S&P 500: +1.55% to 6,705.12 (+102.13 points), its best day since October 13 – Nasdaq Composite: +2.69% to 22,872.01 (+598.92 points), its strongest session since May 12
The session’s tone was decisively pro-risk as the prospect of easier policy tightened spreads between growth and defensives. While near-term FX volatility and yield dynamics were not the primary drivers on the day, the equity market’s response reflected an improved outlook for liquidity conditions into year-end. BPayNews notes that traders characterized the move as both positioning-led and fundamentally supported by an easier prospective policy stance.
Biggest movers over 5% Broadcom (+11.10%), Nebius NV (+10.35%), SoFi Technologies (+8.63%), Western Digital (+8.43%), Micron (+7.99%), Robinhood Markets (+7.15%), Tesla (+6.82%), Alphabet A (+6.28%), AMD (+5.53%), Grayscale Bitcoin Trust (+5.47%), Lam Research (+5.42%), Alibaba ADR (+5.13%), Shopify (+5.12%), Bitcoin Futures (+5.08%), MicroStrategy (+5.01%).
Market Highlights – Nasdaq +2.69%, best daily gain since May 12; S&P 500 +1.55%, best since October 13 – Dovish Fedspeak (Daly, Waller) bolsters December rate-cut expectations – Semiconductors and AI complex lead: Broadcom +11.1%, Micron +8.0% – Crypto-exposed equities advance: GBTC +5.5%, MicroStrategy +5.0% – Risk appetite improves as investors rotate into high-beta and mega-cap growth
What traders are asking Q: What triggered today’s rally? A: Dovish commentary from Fed officials Mary Daly and Christopher Waller strengthened expectations for a December rate cut, encouraging a broad risk-on move led by tech.
Q: Which sectors outperformed? A: Technology and semiconductors led gains, with notable outperformance from AI and memory names. Crypto-linked equities and select fintechs also rallied.
Q: Did the move reflect positioning or fundamentals? A: Both. The prospect of easier monetary policy supported fundamentals, while short-covering and momentum flows amplified gains in high-beta tech.
Q: What could drive the next leg? A: Incoming U.S. economic prints, additional Fed communication, and any shifts in rate expectations will steer equity volatility and sector leadership into month-end.
