U.S. Stocks Surge as Fed Rate Cuts and Inflation Data Loom

Markets rally on strong jobs report and rate cut optimism, but upcoming inflation data could influence Federal Reserve decisions.

The S&P 500 has gained over 27% year-to-date, with a third consecutive weekly rise driven by optimism about potential Federal Reserve rate cuts.
November's jobs report exceeded expectations with 227,000 new jobs added, though the unemployment rate rose slightly to 4.2%.
Upcoming consumer price index (CPI) data, expected to show a 2.7% annual increase, could impact the Fed's rate decision at its December 17-18 meeting.
Investors anticipate a 90% likelihood of a 25-basis-point rate cut in December, though higher-than-expected inflation could temper future rate cut expectations.
Concerns grow over high stock valuations and overly bullish market sentiment, with the S&P 500 trading at its highest price-to-earnings ratio in over three years.