(MENAFN) US equity markets ended higher midweek as anticipation for a potential rate reduction at the Federal Reserve’s December session continued to gain momentum.

The Dow Jones Industrial Average advanced 0.67%, or 314.67 points, finishing at 47,427.12. The Nasdaq rose 0.82%, or 189.1 points, to close at 23,214.69, while the S&P 500 gained 0.69%, or 46.73 points, reaching 6,812.61.

The Volatility Index (VIX), frequently called the "fear index," dropped 7.38% to 17.19.
Investor sentiment strengthened as expectations of a further Federal Reserve rate cut in December increased.

CME FedWatch data indicated that market participants now assign an 85% probability of a reduction next month.

Analysts highlighted that the likelihood of a 25-basis-point decrease has climbed following dovish statements from multiple Fed officials.

They also noted that recent economic data provides the central bank with room to further ease monetary policy.

In parallel, the Fed's "Beige Book" report, which evaluates the current condition of the American economy, revealed minimal shifts in overall activity.

The report observed that consumer spending continued to decline and employment showed a slight dip.

On the macroeconomic side, first-time unemployment claims in the US decreased by 6,000 to 216,000 last week, falling below forecasts.

Additionally, new durable goods orders increased by 0.5% in September compared to the prior month, in line with predictions.

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