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Interest rate cut expectations rise, U.S. residential construction commercial performance climbs

On Friday, interest-sensitive residential builder stocks rose due to increased hopes for interest rate cuts. According to CME's FedWatch tool, the probability of the Federal Reserve cutting rates by 25 basis points at the December FOMC monetary policy meeting jumped from 39% on Thursday to about 75%. The S&P 1500 Homebuilders Index rose 5.4%, marking the largest intraday gain in four months: D.R. Horton rose 6%, Lennar rose 5%, and PulteGroup rose 5%. Amid stock market volatility and dovish comments from New York Fed President Williams, the U.S. 10-year benchmark yield fell to around 4.08%. The decline in yields could lead to lower mortgage rates, making housing more affordable for consumers, which would benefit home builders. Additionally, home improvement retailers Home Depot and Lowes rose 3% and 2% respectively, while Builders FirstSource rose over 5%

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