Equities rise on Fed rate cut optimism, Boeing jumps

By Chuck Mikolajczak

NEW YORK, Dec 2 (Reuters) - U.S. stocks closed higher to record their sixth gain in seven sessions in muted trading on Tuesday, buoyed by gains in technology shares as expectations the Federal Reserve will cut interest rates next week remain elevated.?

Equities declined on Monday amid soft data on the manufacturing sector, a jump in U.S. Treasury yields as Japanese bond yields surged, and a drop in bitcoin and crypto-related stocks.?

But with a dearth of economic data for the session, the rise in bond yields eased and bitcoin rebounded, which enabled stocks to recover somewhat as the focus shifted to the Fed.

"It's possible that both of those things are adding a little bit of volatility to the market at a time when there's kind of a catalyst vacuum until the Fed," said Ross Mayfield, investment strategist at Baird in Louisville, Kentucky.?

"On the flip side, it seems like largely you can take away positive consumer read-throughs on some of these Black Friday, Cyber Monday, data points. I'm more content or happier to see the strength in the consumer versus some of these things happening under the surface with yields and bitcoin. Those are things that will pass."

BOEING SURGES ON FORECAST

The Dow Jones Industrial Average rose?185.13 points, or 0.39%, to 47,474.46, the S&P 500 gained?16.74 points, or 0.25%, to 6,829.37 and the Nasdaq Composite gained?137.75 points, or 0.59%, to 23,413.67.?

Boeing shot up 10.1% as the biggest boost to the Dow, accounting for roughly 117 points to the upside, after the planemaker forecast higher deliveries for its 737 and 787 jets next year. Boeing also lifted the S&P 500 industrials index 0.9%, making it the best performing of the 11 major S&P sectors.?

Also higher was tech, which rose 0.8%, fueled by gains in megacaps Apple, Nvidia and Microsoft of about 1% each, while Intel shares jumped.?

Recent data has pointed to a gradually cooling economy, and policymakers had urged caution on rate cuts, warning that inflation pressures could be rekindled. But comments from several Fed officials in recent days sent market expectations soaring for a rate cut at the central bank's December meeting.

Expectations for a rate cut of 25 basis points at the Fed meeting are at 89.2%, according to CME's FedWatch Tool, up from 63% a month ago.??

Friday's release of the Personal Consumption Expenditures Index, the Fed's preferred inflation gauge, could further solidify expectations for the central bank's policy call next week.

Markets were also eyeing who may succeed Fed Chair Jerome Powell when his term ends next year, with reports suggesting White House economic adviser Kevin Hassett is a top contender. Trump said on Tuesday he would announce his selection early next year.?

On the downside, Procter & Gamble declined 1.1% after the consumer packaged goods company flagged a hit from the U.S. government shutdown.

Warner Bros Discovery climbed 2.8% after reports said it received a second round of bids, including an offer from Netflix.

Crypto stocks advanced, including Strategy, up 5.8%, and Coinbase, up 1.3%, as bitcoin prices rebounded after its largest dollar loss since May 2021 in the previous session.

Advancing issues outnumbered decliners by a 1.01-to-1 ratio on the NYSE, while on the Nasdaq, declining issues outnumbered advancers by a 1.07-to-1 ratio.?

The S&P 500 posted?11 new 52-week highs and three?new lows while the Nasdaq Composite recorded 70 new highs and 100 new lows.

Volume on U.S. exchanges was 15.35 billion shares, compared with the 18.42 billion average for the full session over the last 20 trading days.

(Reporting by Chuck Mikolajczak; additional reporting by Johann M Cherian and Pranav Kashyap in Bengaluru; Editing by Tasim Zahid, Shinjini Ganguli, Rod Nickel)