Traders work on the floor of the New York Stock Exchange.
Brendan McDiarmid | Reuters
Stocks surged on Thursday; Dow Jones Industrial Average and S&P 500 Stocks hit new record highs as traders reacted to the Federal Reserve’s decision to cut interest rates by half a percentage point on Wednesday.
The 30-stock index rose 522.09 points, or 1.26 percent, to finish at 42,025.19, its first closing above the 42,000 threshold. The S&P 500 rose 1.7 percent to close at 5,713.64, surpassing the 5,700 mark for the first time. Nasdaq Composite Index It rose 2.51% to close at 18,013.98.
On Thursday, weekly jobless claims fell by 12,000 to 219,000, well below expectations, giving traders some assurance that the Fed is planning a soft landing for the economy.
The rate cut put investors back in a risk-on mood, sending tech stocks soaring. NVIDIA and Am Shares rose about 4% and nearly 6%, respectively. Micron Technology Other big tech stocks: Meta Platform and alphabet They rose 3.9% and 1.5%, respectively.
Stocks also surged Thursday as interest rates fell and stimulus efforts spurred growth. JPMorgan Chase Industrial stocks up 1.4% Caterpillar and Home Depot These figures were up 5.1% and 1.7%, respectively.
The Fed on Wednesday cut its overnight lending rate to a range of 4.75% to 5.00% from 5.25% to 5.50%, surprising some investors who had criticized the size of the initial cut. It’s the first time the Fed has cut rates in four years.
“I’m not surprised the market bounced back pretty well today. Some of the earnings growth expectations were getting a little out of date,” said Timothy Chubb, chief investment officer at Girard Advisory Services.
“Stock prices have been rising in recent weeks, but overall there are certainly many companies in the market that would benefit from looser monetary policy, particularly small caps,” he added.
