Equity Markets Rally Intraday as Odds of Fed Rate Cut Jump

02:12 PM EST, 11/21/2025 (MT Newswires) -- US benchmark equity indexes were higher intraday as the odds of a Federal Reserve interest rate cut next month soared following remarks by New York Fed President John Williams.

The Dow Jones Industrial Average was up 1.7% at 46,520.2 after midday Friday, while the S&P 500 rose 1.6% to 6,644.3. The Nasdaq Composite advanced 1.5% to 22,386.6. All sectors were in the green, led by health care and materials.

New York Fed's Williams said policymakers can afford to further reduce interest rates to support a weakening labor market.

"I view monetary policy as being modestly restrictive, although somewhat less so than before our recent actions," Williams said. "Therefore, I still see room for a further adjustment in the near term to the target range for the federal funds rate to move the stance of policy closer to the range of neutral, thereby maintaining the balance between the achievement of our two goals."

On Thursday, delayed government data showed the US economy added more jobs than projected in September, though the unemployment rate hit the highest level since 2021.

The probability that the central bank's Federal Open Market Committee will lower rates by 25 basis points in December surged to 74% Friday from 39% Thursday, according to the CME FedWatch tool. The odds of rates remaining unchanged plunged to about 26% from 61%.

Separately, Dallas Fed President Lorie Logan said Friday she's "not certain" if there's room for further monetary policy easing following two back-to-back cuts already delivered this year.

"In the absence of clear evidence that justifies further easing, holding rates steady for a time would allow the FOMC to better assess the degree of restriction from current policy," Logan said. "Taking the time to learn more can help us avoid unnecessary reversals that might generate unwanted financial and economic volatility."

The latest remarks by Williams and Logan come as the FOMC appears to be divided over the next monetary policy action amid high inflation and a weak labor market, as reflected in the minutes of the committee's October meeting released earlier this week.

US Treasury yields were lower intraday Friday, with the 10-year rate down 2.3 basis points at 4.08% and the two-year rate dropping 2.7 basis points to 3.53%.

In economic news, US consumer sentiment improved after the federal government shutdown ended, but remained downbeat amid macro pressures, final survey results for November from the University of Michigan showed.

Last week, the US Congress passed a legislation to fund the federal government through the end of January, ending weeks of stalemate between Republicans and Democrats that caused the longest-ever shutdown of 43 days.

West Texas Intermediate crude oil was down 2.1% at $57.76 a barrel intraday Friday. "Oil extended losses as the US pushed for a Russia-Ukraine peace deal that could boost global supply," D.A. Davidson said in a note to clients.

In company news, Ross Stores (ROST) shares were up 7.8%, the top gainer on the S&P 500. The off-price retailer late Thursday logged an unexpected increase in fiscal third-quarter earnings as price-conscious consumers turned to it amid high inflation.

Enviri (NVRI) shares surged 28% intraday Friday after the US environmental company said it agreed to sell its hazardous-waste unit Clean Earth to French water and waste management company Veolia Environnement in a deal worth about $3.04 billion. Enviri (NVRI) also said it plans to spin off its Harsco environmental and rail businesses into a standalone publicly traded entity.

Cloud computing company Oracle's (ORCL) shares declined 5.4%, the worst performer on the S&P 500.

Gold was up 0.5% at $4,078.30 per troy ounce, while silver fell 0.7% to $49.96 per ounce.

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