Nasdaq Hits Record High, Fed Rate Cut Likely

The Nasdaq surged 347.65 points (1.8%) to a new record closing high of 20,034.89 while the S&P 500 climbed 49.28 points (0.8%) to 6,084.19. Dow closed down 99.27 points (0.2%) at 44,148.56. The blue chip index closed lower for the fifth straight session amid a slump by shares of UnitedHealth (UNH).

Core consumer prices still rose by 0.3% in November excluding food and energy prices. The Labor Department also said core consumer prices in November jumped by 3.3% compared to the same period last year. With the data matching expectations, the report has increased confidence the Federal Reserve will lower interest rates by another quarter point next week. CME Group's Fed Watch Tool is currently indicating a 98.6% chance the Fed will cut rates by 25 basis points at its December meeting.

Gold stocks saw substantial strength on the day amid a sharp increase driving the NYSE Arca Gold Bugs Index up by 3.9%. Airline stocks saw significant strength with the NYSE Arca Airline Index soaring by 3.7%. Semiconductor, networking and software stocks also saw considerable strength, contributing to the surge by the tech-heavy Nasdaq. oil service, retail and brokerage stocks saw notable strength. Healthcare stocks bucked the uptrend.

Asia-Pacific turned in a mixed performance. Japan's Nikkei 225 Index closed just above the unchanged line and China's Shanghai Composite Index rose by 0.3%, while Hong Kong's Hang Seng Index slid by 0.8%. the major European markets have all moved to the upside on the day. While the French CAC 40 Index climbed by 0.4%, the German DAX Index and the U.K.'s FTSE 100 Index rose increased by 0.3%.

In the bond market, treasuries moved lower over the course of the session after showing a lack of direction in early trading. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 5.0 bps to 4.27%.