Investors Brace for Fed Rate Cut Amidst $14 Trillion Stock Surge

The US stock market is poised for a pivotal moment next week, with investors keenly awaiting the Federal Reserve’s upcoming monetary policy meeting. A massive $14 trillion rally has already propelled stocks to record highs, largely fueled by strong expectations that the Fed will resume cutting interest rates.

A 25-basis point reduction on Wednesday is widely anticipated, seen by many as a certainty. The S&P 500 Index has surged 32% since its April lows, buoyed by bets on multiple rate cuts this year. Historical data suggests optimism may be warranted; past periods following the resumption of rate cuts after a six-month or longer pause have shown an average 15% gain in the index a year later, outperforming typical first-cut cycles.

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