12:28 PM EDT, 06/26/2025 (MT Newswires) -- US equity indexes were up in midday trading Thursday as growing expectations of three interest-rate cuts by year-end boosted investor sentiment and pushed government bond yields and the dollar lower.

The Nasdaq climbed 0.7% to 20,104.1, approaching its all-time high, while the S&P 500 added 0.6% to 6,130.5 and the Dow gained 0.7% to 43,266.5. All sectors advanced intraday, except for consumer staples and real estate, with energy, materials, and communication services leading the pack.

The ICE U.S. Dollar Index declined 0.4% to 97.29, touching a 52-week low earlier in the day as the greenback weakened against major currencies. Thierry Wizman, global foreign-exchange and rates strategist at Macquarie Group, attributed the dollar's decline to diminished geopolitical tensions and a market repricing around monetary policy expectations.

The Wall Street Journal reported President Donald Trump may announce his choice to succeed Federal Reserve Chair Jerome Powell as early as September, possibly contributing to the dollar's weakness. Powell's term is due to end in May, and the protocol reportedly is for the president to announce a successor three to four months in advance to avoid uncertainty in monetary policy.

Rate-cut odds shifted notably, with markets now pricing in a 47% chance of three 25-basis-point cuts this year, compared with just 22% a week earlier, according to the FedWatch Tool. Meanwhile, revised GDP data showed the US economy contracted by 0.5% in Q1, more than an earlier estimate of a 0.2% decline, highlighting a softening momentum after 2.4% growth in Q4.

Most US Treasury yields declined, with the 10-year down 2.6 basis points to 4.27% and the two-year traded 4.7 basis points lower at 3.73%.

West Texas Intermediate crude oil futures rose 1.5% to $65.85 a barrel.