Wall Street Hits Record Highs After Fed Rate

Wall Street surged to new record highs on Thursday, with the S&P 500 reaching an all-time peak, as investors grew increasingly optimistic that the Federal Reserve could engineer a “soft landing” for the U.S. economy. The Dow Jones Industrial Average rose by 521 points, closing at a record 42,040.60, while the S&P 500 climbed 1.82% to 5,720.41. The Nasdaq Composite also jumped by 2.76%.

Technology stocks led the rally, with notable gains from Nvidia (up 4.97%), Meta (up 3.69%), and Apple (up 3.8%). This surge came in the wake of the Fed’s decision to cut interest rates by 50 basis points, the first rate reduction in four years, signalling a shift in the central bank’s approach after a year of holding rates steady.

Thursday’s market movements reflected a delayed positive reaction to the Fed’s rate cut, which investors believe could help reduce inflation without triggering a recession. Fresh economic data, including lower-than-expected jobless claims, further fueled optimism, suggesting that the U.S. economy remains resilient.

Federal Reserve Chairman Jerome Powell emphasized that the decision to implement a larger rate cut was a proactive measure, aimed at ensuring inflation trends towards the 2% target. However, he cautioned that this aggressive approach should not be viewed as the new norm, indicating that the Fed will continue to adjust its policies based on evolving economic conditions.