New York.Stocks rose Thursday, with the Dow Jones Industrial Average and S&P 500 hitting new record highs, as traders cheered the Federal Reserve’s decision to cut interest rates by half a percentage point.
The Dow Jones gained 522.09 points, or 1.26 percent, to close at 42,025.19, its first close above the 42,000 threshold.
The S&P 500 rose 1.7 percent to close at 5,713.64, breaking above 5,700 for the first time. The Nasdaq Composite gained 2.51 percent to 18,013.98. Traders got some validation that the Fed was engineering a soft landing for the economy as weekly jobless claims fell 12,000 to 219,000, which was well below estimates.
Technology stocks rose as the rate cut encouraged investors to return to a risk-on mood.
Shares of Nvidia and AMD rose about 4 percent and nearly 6 percent, respectively. Micron Technology added 2.2 percent. Other big tech stocks like Meta Platforms and Alphabet advanced 3.9 percent and 1.5 percent, respectively. Stocks leveraged by lower rates that stimulate the economy also rose Thursday. Financial giant JPMorgan Chase rose 1.4 percent. Industrial stocks Caterpillar and Home Depot gained 5.1 percent and 1.7 percent, respectively. The Fed lowered its overnight lending rate to a range of 4.75 percent to 5 percent, from 5.25 percent to 5.5 percent on Wednesday, which came as a surprise to some investors who criticized the size of this initial cut. This is the first rate cut by the Fed in four years. “It’s not surprising to see markets bounce back pretty well today. We were running a little behind on some of the earnings growth estimates,” said Timothy Chubb, chief investment officer at Girard Advisory Services. With information from CNBC
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