Askume, Sept 19 – Wall Street’s major stock indexes rose sharply on Thursday, with the S&P 500 and Dow Jones hitting record highs during the session, as the Federal Reserve cut interest rates by half a percentage point and forecast further cuts.
Rate-sensitive growth stocks, which have played a key role in economic growth this year, have surged, including top companies such as Microsoft (MSFT.O) up 1.9%, Tesla (TSLA.O) 7.1% and Apple (AAPL.O).Increase of 3.4%.
Semiconductor stocks such as Nvidia (NVDA.O) rose 5.3%, Advanced Micro Devices (AMD.O) added 6% and Broadcom (AVGO.O) added 4.7%, pushing the Philadelphia SE Semiconductor Index (.SOX) up 4.8%.
The Russell 2000 Index (.RUT), which tracks small-cap stocks, rose 1.8% in line with the broader market, as a low interest rate environment boosted prospects for lower operating costs and higher profits.
As of 11:49 a.m. EST, the Dow Jones Industrial Average (.DJI) rose 428.60 points, or 1.03%, to 41,931.70 ; the S&P 500 (.SPX) rose 97.47 points, or 1.73%, to 5,715.73; SPX ) rose 97.47 points, or 1.73%, to 5,715.73.
Eight of the 11 S&P 500 sectors rose, with technology (.SPLRCT) gaining 3.4%, while utilities (.SPLRCS) and consumer staples (.SPLRCU) added 3.4%.
After making a big decision on Wednesday , the Fed is expected to cut interest rates by 50 basis points in 2024 and analysts said macroeconomic forecasts have been issued that show stable economic growth and low unemployment.
Brett Kenwell, an investment analyst at eToro, said: “The market is reacting to yesterday’s news from the Fed. They want to hear that we are not going into a recession, and Chairman Powell’s news reassuringly shows that the economy is in good shape.”
“A soft landing remains a possibility; it remains the default expectation. However, there is clearly still concern that the labor market is moving from a soft landing to a soft landing.”
The data showed that the number of initial jobless claims fell to a four-month low in the week ended September 14.Strong job growth was seen in September .
Traders currently see a 61.1% chance that the central bank will cut interest rates by 25 basis points at its November meeting, according to CME Group’s FedWatch tool.
Bank of America Global Research estimates that interest rate cuts will reach 75 basis points by the end of this year, up from 50 basis points previously expected.
Evercore ISI data dating back to 1970 shows that the S&P 500 gained an average of 14% in the six months following the first rate-cut cycle.
September has been a disappointing month overall for US stocks, with the S&P 500 down an average of 1.2% since 1928, but is up more than 1% so far this month.
The broad bank index (.SPXBK) rose 2%, led by Citigroup .(CN) and Bank of America (BAC.N) followed suit as big banks lowered their key interest rates .
Among companies that moved separately, maternity benefits manager Progyny (PGNY.O) slid 30% after a major customer informed it had decided to exercise a 90-day option to terminate its service contract.
On the NYSE, advancing issues outnumbered declining issues by a ratio of 4.04-1, and on the Nasdaq, the ratio of advancing issues to declining issues was 3.88:1.
51 S&P 500 stocks were at 52-week highs and no new lows; 134 Nasdaq stocks were at new highs and 47 were at new lows only.
