The U.S. stock market surged on Thursday following the Fed’s 50bps interest rate cut, with the S&P 500 reaching a new high. The Fed’s rate cut is the first in four years, following a string of years of battling inflation in the country. Stocks took a slight tumble in the closing hours following the rate cut, but on Thursday, the market witnessed significant gains.
Markets rallied today as investors embraced the potential benefits of easing monetary policy. The S&P 500 jumped, reaching a new intraday high following Wednesday’s 0.3% decline. Treasury yields also continued to rise, with the 10-year yield climbing to 3.75%. At press time, the S&P 500 sits at 5,725.21.
Almost every major group in the S&P 500 gained; the benchmark is poised for its 39th record in 2024. Tech companies saw some of the best gains, with Nvidia and AMD jumping over 4%. Additionally, large-cap tech firms like Meta and Alphabet advanced 3.3% and 2.2%, respectively. Financial stocks also saw notable gains, with JPMorgan Chase rising 1.5%. Industrial stocks similarly advanced.
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Furthermore, investors will look towards earnings reports as Q3 closes to perhaps further spur market gains. With less than two weeks remaining in the quarter, analysts suggest that the Fed’s move may bolster the chances of an economic “soft landing,” In this case, inflation cools without significant harm to growth.
“Despite some volatility after the Fed’s rate cut, the S&P 500’s bullish trend remains intact,” said Fawad Razaqzada at City Index and Forex.com. “The Fed’s decision to deliver a 50-basis point rate cut was largely welcomed by investors. The move was seen as a bold but necessary step to ease economic concerns without sending panic signals reminiscent of the 2008 financial crisis.”
The DOW also climbed to 42,109.40 in the opening hours of trading.
