U.S. Market Rally Driven by Fed Rate-Cut Expectations (Nov 24, 2025)

On November 24, 2025, U.S. equity markets rallied driven by growing expectations of Federal Reserve interest rate cuts. Key indices showed mixed but overall positive performance: the NASDAQ Composite led with a +1.73% gain, followed by the S&P 500 (+1.03%) and Dow Jones Industrial Average (+0.17%) [0]. Sector performance revealed significant divergence: healthcare was the top performer (+1.44%), while real estate lagged (-1.49%) [0].

The rally was triggered by dovish comments from Fed officials: New York Fed President John Williams stated rates could fall “in the near term,” and Governor Chris Waller echoed these views, pushing the market’s probability of a December rate cut to 81% (up from 42% a week prior) [3]. Goldman Sachs forecasted three additional cuts (December 2025, March and June 2026) bringing rates to 3-3.25% [2].

• Tech Sector Outperformance
  : The NASDAQ’s strong gain (+1.73%) reflects investor preference for growth stocks, which benefit from lower discount rates associated with rate cuts [0].
• Sector Divergence
  : Healthcare’s defensive characteristics combined with rate sensitivity drove its outperformance, while real estate’s drop suggests concerns over long-term mortgage rates or oversupply, despite short-term cut expectations [0].
• Rapid Sentiment Shift
  : The 39-percentage-point increase in December rate cut probability in a week indicates significant market sensitivity to Fed communication [3].

• Risks
  : Overly optimistic rate-cut expectations could lead to a market correction if the Fed holds rates steady in December. Real estate’s underperformance signals potential caution about the sustainability of the rally in interest-sensitive sectors [0].
• Opportunities
  : Tech and healthcare sectors may continue to benefit if rate cuts materialize, while defensive sectors could outperform if cuts are delayed [0].
• Factors to Monitor
  : December Fed policy meeting (Dec 16), upcoming economic data (retail sales, producer prices), and sector rotation trends [3].

• Market Indices
  : S&P500 (+1.03% to 6705), NASDAQ (+1.73% to22872), Dow (+0.17% to46448) [0].
• Sector Performance
  : Healthcare (+1.44%), Real Estate (-1.49%) [0].
• Rate Cut Expectations
  : 81% chance of December25bp cut (CME FedWatch) [3].
• Analyst Forecast
  : Goldman Sachs expects three cuts by June2026 [2].