Nasdaq Surges as Rate Hike Odds Plummet Amid Fed Signals

The odds of a Federal Reserve rate hike at the end of this month have plummeted from 70% to just 20%, according to recent data. This decline in expectations is largely due to 'Fedspeak', where officials signaled that they may pause further rate hikes in October. New York Fed President John Williams stated there's 'no need for urgency' and Fed Vice Chair Philip Jefferson said the Fed may require more time to decide on any future adjustments.

Despite this, the labor market showed softer-than-expected growth, adding only 29,000 jobs in September, well below the projected 81,000. However, the three-month average job gain remains stable at 50,000. Inflation figures for August also came in lower than expected, with headline and core PCE inflation unchanged at 3.4% and 3.0% year-over-year, respectively.

The improved economic outlook has led to a surge in the Nasdaq-100 index, which reached a new record high this week. Meanwhile, real consumer spending grew 0.6% in August, beating expectations of 0.5%, and second-quarter GDP growth was revised up to 2.2% from 1.5% on stronger spending and business investment.