MENA Newswire News Desk: Stocks surged on Thursday as Wall Street celebrated the Federal Reserve’s significant rate cut. The Dow Jones Industrial Average rose by 380 points, or 0.9%, while the S&P 500 gained 1.5%, and the Nasdaq Composite surged 1.9%. Investors responded positively to the Federal Reserve’s decision to lower interest rates by half a percentage point, which was announced on Wednesday. The rate cut marks the Fed’s first in four years, and traders viewed it as a positive step toward a potential soft landing for the U.S. economy.
The market also reacted to a report showing that weekly jobless claims fell by 12,000 to 219,000, significantly below expectations. This decline fueled optimism that the Fed’s measures are beginning to support the labor market. Technology stocks led the rally, with Nvidia and AMD rising more than 5% and 4%, respectively. Micron Technology gained over 2%, while other tech giants such as Meta and Alphabet advanced 3.3% and 2.2%.
Financial stocks also performed well, with JPMorgan Chase climbing 1.5%. Meanwhile, industrial stocks, including Caterpillar and Home Depot, saw gains of 3.3% and 1.5%. Investors were largely optimistic about the Fed’s move, which lowered the overnight lending rate to a range of 4.75% to 5%, down from the previous 5.25% to 5.5%. Tom Lee, head of research at Fundstrat Global Advisors, noted that the Fed’s rate cut sets the stage for strong market performance in the coming months. However, Lee cautioned that uncertainty could rise ahead of the U.S. presidential election, which may impact investor sentiment.
On Wednesday, both the S&P 500 and Dow initially rallied to new record highs following the Fed’s rate cut announcement but closed the session lower after a period of volatility. The central bank’s move has reignited discussions about future rate cuts, with some experts predicting further reductions by the end of the year. With tech stocks leading the charge, the market remains focused on upcoming economic data releases that could further influence the Fed’s monetary policy trajectory. As of now, Wall Street appears to be embracing the central bank’s proactive approach to sustaining economic growth.