U.S. stocks posted their largest monthly gain in November since the start of the year, with investors becoming increasingly confident that the Federal Reserve’s interest rate hikes will soon come to an end. The benchmark S&P 500 index jumped by 8.9%, while the Nasdaq Composite surged by 10.7%. The Dow Jones Industrial Averages rose 8.8% for the month.
While the Federal Reserve kept interest rates steady at its November policy meeting, investors are increasingly betting that rate cuts will come amid central bank policymakers’ suggestions that fiscal policy may be loosened. Recent jobs data has shown that the labor market is softening while still supporting economic growth. Two reads on inflation have also shown that prices have slowed down to their slowest rates in over two years.
After digesting the latest economic data, markets have priced a 92% chance of the Federal Reserve implementing a rate cut by the end of its June meeting next year; a significant rise from 60% a month ago.