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Dow, S&P 500, Nasdaq jump as Fed resumes hikes

Photo of smsmalex smsmalex10 hours ago
73 4 minutes read
Dow, S&P 500, Nasdaq jump as Fed resumes hikes

U.S. stocks soared on Thursday amid growing optimism that the Federal Reserve’s drastic interest rate cut will lead to a “soft landing” for the U.S. economy.

The S&P 500 Index (^GSPC) climbed about 1.5%, while the Dow Jones Industrial Average (^IXIC) rose nearly 1%, both trading near record highs. The tech-heavy Nasdaq Composite (^IXIC) led the gains, up 2.5%.

Stock markets are rising as investors look more closely at the Fed’s decision to kick off its new rate cycle with a 50 basis point cut. After Wednesday’s monetary policy announcement, indicators oscillated before closing lower.

Wall Street has absorbed Chairman Jerome Powell’s message that cutting rates sharply in a relatively strong economy will eventually avert the risk of recession — and is a sign of faith, not panic, about current conditions.

Bank of America now estimates that the Fed will cut rates by 0.75% by the end of the year, up from 0.50% as it had previously forecast. By comparison, the central bank’s own “dot plot” indicates that policymakers expect a cut of half a percentage point.

Learn more: What the Fed’s Rate Cut Means for Bank Accounts, CDs, Loans, and Credit Cards

Rate-sensitive growth stocks climbed in premarket trading, with the mega-cap Big Tech stocks that have powered this year’s rally posting gains. Alphabet (GOOG), Microsoft (MSFT) and Meta (META) all gained about 2%, while Apple (AAPL) added more than 3%. Tesla (TSLA) and Nvidia (NVDA) rose nearly 5%.

With the Fed reversing course, some market participants are once again watching data releases for potential volatility. A weekly report from the Labor Department on initial jobless claims released Thursday morning showed a drop to a four-month low. The figure for the week ended Sept. 19 came in at 219,000, while the previous week’s total was revised up 1,000 to 231,000.

Live6 updates

  • Dow, S&P 500, Nasdaq jump as Fed resumes hikes

    Bank stocks rise on Fed rate cut

    Yahoo Finance’s David Hollerith reports:

    U.S. bank stocks jumped Thursday after the Federal Reserve cut rates sharply, a sign of optimism among investors who now expect easing monetary policy to boost Wall Street giants and smaller regional lenders.

    Goldman Sachs (GS), Capital One (COF) and Citigroup (C) each rose more than 3% Thursday morning, followed by smaller gains for Wells Fargo (WFC), Bank of America (BAC), JPMorgan Chase (JPM) and Morgan Stanley (MS).

    Read more here.

    Bank stocks rose Thursday after the central bank cut rates. Bank stocks rose Thursday after the central bank cut rates.

    Bank stocks rose Thursday after the central bank cut rates.

  • Dow, S&P 500, Nasdaq jump as Fed resumes hikes

    Unemployment claims at lowest level in 4 months, a good sign for the labor market

    Investors looking for signs of a “soft landing” pointed to the latest data on initial jobless claims, which showed a fall to their lowest level since May.

    The Labor Department’s report for the week ending Sept. 19 came in at 219,000, compared with expectations for 230,000. The previous week’s total was revised up 1,000 to 231,000.

    A decline in initial jobless claims indicates the labor market may be holding up better than expected.

    On Wednesday, the Federal Reserve cut interest rates by 50 basis points, raising questions about whether policymakers were opting for a deeper cut amid a weakening jobs market.

    At Wednesday’s press conference, Fed Chairman Jerome Powell noted that the unemployment rate has risen but remains relatively low at 4.2%. Powell described the economy as “in good general health.”

  • Dow, S&P 500, Nasdaq jump as Fed resumes hikes

    Stocks near session highs, tech fueling gains after rate cut

    Stocks rose Thursday morning, with the tech-heavy Nasdaq Composite (^IXIC) leading market gains after the Federal Reserve announced a rate cut earlier in the session.

    The Nasdaq gained as much as 2.7%, led by gains in technology stocks, which typically benefit from a lower interest rate environment.

    The Dow (^DJI) climbed more than 1% to hit an all-time intraday high while the S&P 500 (^GSPC) also hit a record high in early trading.

    Technology stocks led the market's gains on Thursday. Technology stocks led the market's gains on Thursday.

    Technology stocks led the market’s gains on Thursday.

  • Existing home sales fall in August as mortgage rates drop

    Existing home sales fell in August as homebuyers stayed away despite mortgage rates hitting their lowest level in more than a year.

    Existing-home sales fell 2.5% from July to a seasonally adjusted annual pace of 3.86 million, the National Association of Realtors said Thursday, the lowest level since October. Economists polled by Bloomberg had expected existing-home sales to hit a pace of 3.9 million in August.

    On an annual basis, pre-owned home sales declined 4.2% in August. The median home price increased 3.1% from last August to $416,700, the 14th consecutive month of annual price increases.

    The combination of scarce inventory, rising prices and high mortgage rates continues to weigh on sales activity – for now.

    “Home sales were disappointing again in August, but the recent development of lower mortgage rates coupled with rising inventory is a powerful combination that will provide the environment for sales to increase in the months ahead,” NAR Chief Economist Lawrence Yun said in a press release.

    However, Fannie Mae economists do not expect business activity to reverse this year despite lower mortgage rates.

    “We forecast that existing home sales in 2024 will fall at the slowest annual pace since 1995,” they said.

  • Dow, S&P 500, Nasdaq jump as Fed resumes hikes

    Campbell’s, seeking growth, must battle private labels and larger rivals

    Yahoo Finance’s Brooke DiPalma reports:

    With products ranging from stuffing-flavored chips to chicken noodle soup and ghost peppers, companies are stepping up competition in grocery aisles.

    As retailers like Walmart (WMT) and Target (TGT) move into private labels, Campbell’s (CPB) is doubling down on innovation, marketing and increasing distribution to sell its popular brands like Goldfish.

    “It all comes down to … creating the right value, which is not just about price,” CEO Mark Clouse told Yahoo Finance at Campbell’s investor day last week. “It’s about how do you add value in a more differentiated and sustainable way.”

    Read more here.

  • Dow, S&P 500, Nasdaq jump as Fed resumes hikes

    Dow, S&P 500 hit intraday records as stocks soar on massive rate cut

    The Dow (^DJI) and S&P 500 (^GSPC) hit record highs on Thursday as investors digested the Federal Reserve’s announcement the previous session – a 50 basis point rate cut.

    The S&P 500 index climbed about 1.7%, while the Dow Jones Industrial Average rose more than 1%, both hitting all-time highs. The tech-heavy Nasdaq Composite (^IXIC) led the gains, up more than 2.3%.

    The major averages moved in a see-saw pattern during the previous session, following the Fed’s decision to cut rates.

    Gold (CG=F) hovered near all-time highs. The precious metal and other commodities climbed as the dollar fell

Photo of smsmalex smsmalex10 hours ago
73 4 minutes read
Photo of smsmalex

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