US stocks have risen for 4 consecutive days, and the probability of a rate cut in December has soared to 85%.

U.S. stocks rose again yesterday, with the Dow Jones index up by 0.7%, the Nasdaq up by 0.8%, and the S&P 500 up by 0.7%, marking four consecutive rises for the three major indices. Technology stocks were particularly strong, with AppLovin(APP) experiencing a big pump of 5.5%.

The most crucial point is that the expectation of interest rate cuts has heated up. The Fed funds futures tool (CME FedWatch) shows that the probability of a 25 basis point rate cut in December is now 85%, compared to only 42% a week ago. What has changed so much? The main reason is that several Federal Reserve officials have recently been signaling—San Francisco Fed President Daly and New York Fed President Williams both support a rate cut in December, citing a slightly weak labor market.

There is another variable: Trump may announce the next chairman of the Federal Reserve before Christmas. The popular candidate, Kevin Hassett, is known for his hawkish stance and advocates for low interest rates. Bank of America economists say that if Hassett takes office, the Federal Reserve funds rate could drop below 3%.

Economic Data: Initial jobless claims fell to 216,000( within 16 days, better than the expected 229,000), but durable goods orders only rose by 0.5%, far below the expected 2.2%. The signals are a bit mixed—employment is decent, but consumption and investment are somewhat weak.

Trading volume was 16.1 billion shares, below the 20-day moving average, but the number of rising stocks crushed the number of falling stocks at a ratio of 3.37:1 on the New York Stock Exchange, and sentiment remains relatively optimistic. The VIX fear index fell by 7.4% to 17.19, and the market is still quite calm.