US STOCKS-Wall Street ends higher, S&P 500, Nasdaq approach record highs on rising rate cut hopes

Bank stocks rise as Fed proposes relaxed leverage rulesEconomic data shows mixed signals with durable goods orders up, GDP downRecord copper prices send Freeport-McMoRan, Southern Copper higher(Updates to market close)By Stephen CulpNEW YORK, June 26 (Reuters) - Wall Street closed higher on Thursday, nudging the S&P 500 and the Nasdaq nearer to record closing highs as the Israel-Iran cease-fire continued to hold and a raft of economic indicators appeared to support the case for the U.S. Federal Reserve lowering borrowing costs this year.A broad rally pushed all three major U.S. stock indexes higher, placing them on track for weekly gains.The S&P 500 and the Nasdaq are now within striking distance of all-time closing highs, while the Nasdaq 100, a subset of the Nasdaq Composite, notched its second consecutive record closing high on Wednesday.“Clearly, the pull forward of rate cuts into 2025 is one of the more significant factors” of the market’s price action, says Bill Northey, senior investment director at U.S. Bank Wealth Management, Billings, Montana. “Expectations now point to three rate cuts this year.”Bank stocks outperformed after the Fed unveiled a proposal to relax its leverage rules, which would ease the capital big banks are required to hold against relatively low-risk assets.“This administration came in promising deregulation,” said Ross Mayfield, investment strategy analyst at Baird in Louisville, Kentucky. “And this is not just an example of that, but kind of a signpost that there could be more to come.”Richmond Fed President Thomas Barkin cautioned against taking options off the table amid ongoing economic uncertainty, but added that he did not expect tariffs to be “as inflationary as a lot of people worry about.”A muted tariff effect could help make the case for a rate cut this fall, according to San Francisco Fed President Mary Daly. Boston Fed President Susan Collins said on Wednesday she’s leaning toward a rate cut later this year amid an uncertain economic outlook.These remarks follow Fed Chair Jerome Powell’s two-day congressional testimony, at which he reiterated the central bank’s wait-and-see policy stance with respect to rate cuts and economic tariff effects.Financial markets are currently pricing in nearly a 21% likelihood of a 25 basis point reduction the Fed Funds target rate at the July Fed meeting, and more than a 75% probability that this year’s first rate cut will come in September, according to CME’s FedWatch tool.“As we look at economic data, including the labor market, economic activity and price levels, we see that some additional easing is appropriate through the end of this year,” Northey added. “The question remains around both magnitude and importantly timing of the first cut.”Last week the Fed released its updated Summary of Economic Projections, which showed policymakers anticipate cutting the key policy rate by about half a percentage point by year-end.A spate of economic data showed first quarter GDP contracted more than previously reported on weaker than expected consumer spending, while ongoing jobless claims reaching multi-year highs, suggesting potential cracks appearing in the labor market.On the other hand, new orders for durable goods and pending home sales provided robust surprises to the upside.According to preliminary data, the S&P 500 (.SPX) gained 49.93 points, or 0.82%, to end at 6,142.09 points, while the Nasdaq Composite (.IXIC) gained 195.48 points, or 0.98%, to 20,169.03. The Dow Jones Industrial Average (.DJI) rose 414.33 points, or 0.96%, to 43,396.76.Micron (MU.O) forecast better-than-expected fourth quarter revenue late Wednesday. Even so, the tech firm’s shares were lower on the day.Nvidia (NVDA.O) extended its gains after reaching a record high on Wednesday.Copper prices jumped to a three-month high, boosting miners Freeport-McMoRan FCX.N and Southern Copper SCCO.N.Continuing claims