Wall Street surged into the green following the Fed's decision to cut interest rates.

The trading session on December 10th (ending in the early hours of December 11th, Vietnam time) on Wall Street closed in a brilliant green, marking one of the strongest breakout days for the US stock market in weeks.

With the Fed's support, Wall Street is nearing its all-time high.

The main impetus came from the Federal Reserve's (Fed) decision to cut interest rates by 0.25 percentage points – a move that was anticipated and awaited by investors. Immediately after the announcement, major indices rose sharply as investors expected further monetary policy easing in the coming year, despite cautious signals from the Fed.

According to official data released after the market closed, the Dow Jones Industrial Average rose 1.05% to 48,057.75 points; the S&P 500 gained 0.67% to 6,886.68 points, just a short distance from its record high set in October; while the Nasdaq Composite also edged up 0.33% to 23,654.15 points. In absolute terms, the S&P 500 rose 46.17 points, the Dow Jones gained 497.46 points, and the Nasdaq added 77.67 points. The Russell 2000, a small-cap index, was the most impressive performer, rising 1.3% to 2,559.61 points, even setting a record closing high.

The upward momentum stemmed not only from the Fed's policy actions but also from market expectations regarding further rate cuts. Although the central bank signaled it would "pause" and wait for clearer data on the labor market and inflation, which is considered "still high," internal Fed forecasts continue to show a moderate expectation of a total rate cut of 24 basis points in 2026. Simultaneously, the Fed raised its 2026 GDP growth forecast from 1.8% to 2.3%, while maintaining its unemployment rate expectation at 4.4%. These adjustments reflect the Fed's increased confidence in the economic recovery, thereby bolstering investor sentiment.

In the press conference following the rate cut decision, Fed Chairman Jerome Powell avoided making a commitment to the possibility of another rate cut in the near future. However, his remarks that the labor market is facing “significant downside risks” and that the Fed “doesn’t want to maintain an overly restrictive policy” conveyed a more dovish sentiment than investors had initially feared. This also contributed to a slight decline in US Treasury yields after the speech, according to Lindsey Bell, chief investment strategist at 248 Ventures, a move that “strongly supported the upward momentum in stocks.”

Similarly, Michael Rosen, Chief Investment Officer of Angeles Investments, assessed that the Fed's acknowledgment of labor market weakness as one of the main reasons for the 25 basis point interest rate cut signals that the possibility of further easing remains, although general expectations about the level of easing in 2026 have not changed much.

In terms of sector performance, nine of the 11 major S&P 500 sectors rose. Industrials led the gains with a 1.8% increase, supported by GE Vernova's impressive surge, with shares rising 15.6% after the company forecast higher 2026 revenue driven by strong demand for AI-related infrastructure. Conversely, defensive utilities declined 0.1%, the smallest drop in the market, while consumer staples also weakened slightly.

Market breadth showed a strong upward trend: on the NYSE, gainers outnumbered losers by a ratio of 2.86:1, recording 496 new highs and only 51 lows. On the Nasdaq, 3,164 stocks advanced compared to 1,642 that declined, a ratio of 1.93:1. The S&P 500 set 45 52-week highs, while the Nasdaq recorded 185 new highs.

However, behind the sharp surge on December 10th lay the cautious sentiment that had accumulated over the preceding weeks. Amid persistent inflation and an uncertain monetary policy outlook, many investors had chosen to stay on the sidelines. The Fed's decision relieved this psychological pressure, causing money to flow back into stocks, particularly industrial, value, and technology stocks, which had been squeezed by persistently high yields.

Small-cap stocks, which are sensitive to interest rates, have benefited greatly and contributed significantly to the overall optimism. However, many experts believe that the current upward trend, while convincing, could reverse quickly if economic data unexpectedly strengthens, making a scenario of interest rate cuts less likely.

From a broader perspective, the US market is currently near historical levels but also faces many unpredictable variables: inflation is not yet fully under control, the labor market shows signs of slowing down, and consumer spending, a crucial pillar of the US economy, is still affected by the high borrowing costs of the previous period. Therefore, analysts recommend that investors maintain diversified portfolios, increase their stock holdings, but not forget hedging measures to cope with volatility.

The December 10th trading session therefore became a noteworthy milestone: it reflected both the significant rebound on Wall Street following favorable news from the Fed and the fact that the market is still closely monitoring macroeconomic signals. Today's rally could be the start of a new trend, but it could also simply be a temporary reaction to a long-awaited policy decision. Investors still need to exercise caution as they enter the final period of the year, where economic data will continue to shape expectations for 2026.

Source: https://thoibaonganhang.vn/pho-wall-bung-no-sac-xanh-sau-quyet-dinh-cat-giam-lai-suat-cua-fed-174952.html