Markets Surge on Anticipation of Fed's Rate Cut

US stock markets experienced significant gains as investors anticipated a potential interest rate cut by the Federal Reserve. The Nasdaq gained over 5% this week, marking its best performance of the year, while the S&P 500 rose by 4% and the Dow Jones Industrial Average increased by 2%.

The positive movement was fueled by a mix of cooling inflation data, with the Producer Price Index showing moderate increases, and rising initial jobless claims. This economic backdrop has led to heightened expectations of a dovish stance from the Fed, potentially resulting in a 0.25% rate cut.

Consumer sentiment also hit a four-month high, as inflation expectations improved and household incomes rose. Despite some volatility, particularly in the tech sector, the overall market sentiment remains optimistic about the upcoming policy easing cycle.