Nasdaq notches record high close; traders focus on rate cuts

The Nasdaq notched a record high close on Monday, lifted by a rally in Broadcom, while the S&P 500 also gained as investors bet the Federal Reserve will soon lower borrowing costs to shore up economic growth.

Investors expect multiple interest rate cuts this year after a troubling nonfarm payrolls report on Friday added to concerns about a weakening US job market. The report, which had dragged down Wall Street in the previous session, has stoked fears of a potential slowdown in the world’s biggest economy.

Traders have fully priced in at least a 25 basis point interest rate cut when the Fed wraps up its two-day policy meeting on September 17, with interest rate futures reflecting a 10% chance of a 50 basis point cut, according to CME Group’s FedWatch tool.

“The focus is on next Wednesday’s Fed rate cut. The market is greedy. It’s already discounted 25 basis points. Now, if people are buying because they expect 50, well, that’s not going to happen,” warned Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma.

Numerous brokerages have revised calls for Fed interest rate cuts. Barclays now anticipates three cuts of 25 bps each in 2025 compared with two earlier, while Standard Chartered expects a 50-bps trim in September – double its earlier projection.

Broadcom climbed 3.2%, extending its rally since the chipmaker said last Thursday it expects sharp artificial intelligence-related revenue growth. Its market capitalization has reached USD 1.6 trillion, and it is Wall Street’s seventh most valuable company.

The S&P 500 climbed 0.21% to end at 6,495.15 points.

The Nasdaq gained 0.45% to 21,798.70 points, its highest close ever. The Dow Jones Industrial Average rose 0.25% to 45,514.95 points.

The S&P 500 is up about 10% so far in 2025, and the Nasdaq has climbed about 13%.

Six of the 11 S&P 500 sector indexes declined, led by utilities, down 1.07%. The S&P 500 technology index rose 0.67%.

This week, investors will keep a close watch on inflation data and the Bureau of Labor Statistics’ benchmark payroll revision for further clues on the US economic health and to see if they could strengthen the case for a bigger rate cut.

“The growth scare from the labor market is going to overwhelm even hot inflation because the Fed right now is viewing any tariff-induced inflation as a one-time price increase,” said Jeff Schulze, head of economic and market strategy at Clearbridge Investments.

Among other stocks, retail trading platform Robinhood Markets  jumped 16% and marketing platform AppLovin soared 12%, with the two companies set to join the S&P 500, effective September 22.

EchoStar rallied 20% after the telecommunications services firm agreed to sell wireless spectrum licenses to SpaceX for its Starlink satellite network for about USD 17 billion.

Other telecommunications companies fell, with AT&T and Verizon both down more than 2% and T-Mobile losing almost 4%.

Declining stocks outnumbered rising ones within the S&P 500 by a 1.0-to-one ratio.

The S&P 500 posted 18 new highs and eight new lows; the Nasdaq recorded 136 new highs and 95 new lows.

Volume on US exchanges was relatively heavy, with 16.2 billion shares traded, compared to an average of 16.1 billion shares over the previous 20 sessions.

(Reporting by Purvi Agarwal and Ragini Mathur in Bengaluru, and by Noel Randewich in San Francisco; Editing by Pooja Desai, Shinjini Ganguli and Richard Chang)