4:08pm: Nvidia hits all-time high
A rally in tech stocks, propelled by chipmaker Nvidia, saw the Nasdaq close 2% higher at a record 17,187 points.
Nvidia closed 5.2% higher at 1,224 points with a market cap just above $3 trillion.
The S&P 500 also recorded a new record high closing level of 5,354 points, having added 1.2%.
The Dow Jones gained 0.3% at 38,807 points.
12:15pm: Majority anticipate Fed rate cuts in September
Stocks continued their climb on Wednesday, driven by optimism surrounding potential interest rate cuts amid indications of weakening labor demand and a slowing economy.
At midday, the Nasdaq led the gains at about 1.4%, while the Dow Jones gained approximately 0.2% and the S&P 500 rose nearly 0.8%.
Technology stocks, including Nvidia, Meta, and Alphabet, saw notable increases, reflecting market sentiment, with Nvidia shares hitting a new all-time high above $1,200.
Other stocks in play were Hewlett Packard Enterprise, which saw big stock gains after reporting strong revenue performance driven by increased sales of AI-focused servers.
Concerns over economic softening have fueled speculation about Fed rate cuts, particularly following a decline in job openings and disappointing private-sector growth.
The anticipation of a Fed policy shift is increasing, with a majority of traders now expecting rate reductions at the September meeting.
Analysts are expecting strong growth in earnings for US blue chips in the next year, according to XTB's Kathleen Brooks.
"The prospect of Fed rate cuts are also boosting the outlook for smaller US firms," Brooks commented.
"Analysts are expecting EPS growth of more than 17% for firms in the Russel 2000."
But, Brooks noted, the risk is that "the US economy weakens more than expected and this weighs on the corporate outlook, but for now that is a risk that the market is willing to discount."
10.28am: Nvidia at record high as Canada cuts rates
US stocks are having a mixed morning session today, with the S&P 500 rising by around 0.22%, or 11 points, after AI tech giant Nvidia soared to fresh all-time highs.
Nvidia opened 2.5% higher, having closed at a record high on Tuesday, with much of its gains driven by its blockbuster earnings report and 10-for-1 stock split announcement last week.
Meanwhile, the Nasdaq rose around 0.74%, or 122 points, and the Dow Jones slipped 0.3%, or 139 points.
Other stocks making moves included Hewlett Packard Enterprises, up 13%, and CrowdStrike, up 6%, after both posted stronger-than-expected results.
Across the northern border, Canada's central bank has become the first of the G7 nations to cut its interest rates.
Borrowing rates were lowered from 5% to 4.75% as expected.
The European Central Bank will meet tomorrow to decide rates in the EU, with markets predicting it too will vote to cut.
7.47am: Shares step higher ahead of US open
Futures are indicating the tech-powered Nasdaq will lead gains as US stocks mostly open higher shortly, continuing the positive momentum from the second half of yesterday's session.
Nasdaq futures are up 0.42%, with Dow futures roughly flat, and S&P 500 futures in the middle, up 0.2% and within 50 points of its all-time high.
Easing inflation fears have been replaced by supposed worries about a US recession after some softer US data this week.
"The emerging story is one of reconvergence taking over from divergence," says market analyst Neil Wilson at Finalto, the US-German 10yr spread down to 180bps from 220bps in mid-April.
Meanwhile the Bank of Canada is seen cutting today and the ECB tomorrow, while US ISM services and ADP payrolls data are out today.
"Treasury yields declined to a three-week low as job openings fell sharply – the case for a rate cut is building, although it seems likely that it is a bit too late for the FOMC to pull the trigger in June," says Wilson.
David Morrison at Trade Nation notes that the S&P 500 is withing 1% of its record intra-day high from a fortnight ago.
"Could the last couple of weeks of pull-back and consolidation have provided the reset required ahead of a rally to take stock indices to fresh record highs? Maybe. But stock market volatility, as measured by the VIX, has also picked up a touch over the last fortnight."
One interpretation, he says, volatility is "returning to more normal levels after falling to lows last seen in 2018. Another is that May’s decline was a final downside blow-off ahead of a more protracted rally as the US stock market becomes a riskier place to invest".