After the US Federal Reserve’s first rate cut in four years, Wall Street’s major indexes rose to record highs on Thursday as global markets welcomed the move.
The benchmark S&P 500 jumped 1.7% to close at its first record high since July at 5,713.64 points. The Dow Jones Industrial Average also rose 1.3% to 42,025.19 points to record a new record. The Nasdaq Composite, which focuses mainly on the technology sector, rose 2.5% to 18,013.98 points.
Federal Reserve Chairman Jerome Powell arrives on Capitol Hill, Washington. (New York Times)
As the Federal Reserve announced its decision to cut rates by 50 basis points to bring rates down from two-decade highs, Wall Street’s indexes fell to settle on the lower side on Wednesday. But just as the global market cheered on the announcement, US stock indexes pulled back.
The S&P 500 is up more than 20% since the start of 2024. The Nasdaq is up more than 22% over the same period, while the Dow Jones Industrial Average is up 11% this year.
Jonathan Cohn, Head of US Rates Desk Strategy at Nomura said, “The jumbo cut appears to have increased the likelihood of a slight landing,” according to Reuters. Cohn continued, “The market will continue to adjust to the Fed’s mixed messages with a bright calendar tomorrow.”
Inflation continues to moderate in the US and policymakers at the Federal Reserve believe that further rate cuts are likely in 2024 by an additional 50 basis points, according to the report. The guard report.
Federal Reserve Chairman Jerome Powell told reporters, “I don’t see anything in the economy that suggests the likelihood of a recession is increasing.” I don’t see that.”