Record-Breaking Rally: The Market's Bet on a Fed Rate Cut

Following an update on the U.S. job market that supported Wall Street's expectation for a "soft landing," U.S. stocks reached new record highs on Tuesday. The S&P 500, Dow Jones Industrial Average, and Nasdaq composite all set new records.

A recent government report showed that the previous estimate for nationwide jobs through March may have been overestimated by 911,000. This new data on a weakening labor market has convinced traders that the Federal Reserve will cut its key interest rate at its upcoming meeting, despite concerns about rising inflation due to recent tariffs. While traders are certain about a rate cut, the recent jobs report caused them to scale back expectations for a deeper-than-usual reduction.

In company news, UnitedHealth Group's stock surged 8.6% after the company affirmed its 2025 profit forecast. Nebius Group, a Dutch AI infrastructure firm, saw its stock skyrocket 49.4% following a multi-billion-dollar contract announcement to provide GPU services to Microsoft. Meanwhile, Fox shares declined 6.1% after the Murdoch family finalized a succession plan that ensures Lachlan Murdoch will control the media empire and maintain the conservative direction of Fox News. Apple's stock slipped 1.5% after unveiling its latest generation of iPhones. In detail, the S&P 500 increased by 17.46 points to close at 6,512.61. The Dow Jones Industrial Average gained 196.39 points, reaching 45,711.34, while the Nasdaq Composite advanced 80.79 points to 21,879.49.

Internationally, stock markets were mixed. France's CAC 40 saw a modest gain despite domestic political uncertainty. In Asia, Japan's Nikkei 225 fell amid political uncertainty following the prime minister's announcement that he would step down.