Askume, Sept 19 – The S&P 500 hit a record high on Thursday, a day after the Federal Reserve cut interest rates by 50 basis points and hinted at more cuts in the future.
The blue-chip Dow Jones Industrial Average also hit a record high and closed above 42,000 points for the first time.
Heavyweight stocks that have benefited from this year’s stock market rally posted fresh gains, with Tesla (TSLA.O) up more than 7% and Apple (AAPL.O) and Meta Platform (META.O) adding around 4%.
AI giant Nvidia (NVDA.O) rose 4%, pushing the PHLX Semiconductor Index (.SOX) up 4.3%.
Better-than-expected unemployment benefits data further boosted global risk appetite.
On Wednesday, the Federal Reserve announced that it would cut interest rates as expected and expressed more confidence that inflation would remain under control. Federal Reserve Chairman Powell said that the US economy remains strong and the central bank will determine the appropriate pace of interest rate cuts in the future.
“The Fed is painting a pretty strong picture of the economy here, so we’re seeing flows into some of the sectors that have underperformed so far this quarter,” said James Ragan, head of wealth management research at D.A. Davidson.
The small-cap Russell 2000 index (.RUT) rose 2.1% as low interest rates reduced operating costs and improved profit prospects.
The S&P 500 index rose 1.70% to close at 5,713.64 points, a record high. The Nasdaq rose 2.51% to 18,013.98 points; the Dow Jones Industrial Average (DOW.N) rose 1.26% to 42,025.19 points.
Eight of the 11 S&P 500 industry indexes rose, with information technology (.SPLRCT) gaining the most at 3.08%, followed by consumer discretionary (.SPLRCD) at 2.2%.
In extended trading, FedEx Corp (FDX.N) was trading higher after the company lowered its fiscal 2025 revenue target.fell 10% after that.
Bank of America Global Research said it now expects a total of 75 basis points in interest rate cuts by the end of the year, up 50 basis points from its earlier forecast.
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 was a disappointing month overall for US stocks, with the S&P 500 down an average of 1.2% since 1928.
The S&P 500 bank index (.SPXBK) rose 2.5%, while Citigroup (CN) and Bank of America (BAC.N) also benefited from a cut in key interest rates .
Shares of fertility benefits manager Progyny (PGNY.O) fell 33% after a major customer informed the company of its decision to exercise a 90-day option to terminate its service contract.
In the S&P 500 (.AD.SPX) , advancing stocks outnumbered declining ones by a 2.4-to-1 ratio.
Looking at the U.S. stock market , gaining stocks outnumber declining stocks by 3.8 to 1 .
Volume on U.S. exchanges remained relatively high, with 12.3 billion shares traded over the last 20 trading days, above the average of 10.8 billion.
