Stock market today: Indexes close at record highs and tech soars after Fed rate cut
By Kelly Cloonan,
2024-09-19
Indexes rallied to record highs as investors cheered Wednesday's rate cut from the Fed.
Tech stocks led the rally, with shares of Nvidia and Meta up 4%.
Jobless claims reinforced the Fed's message of a strong labor market, with last weeks's claims down 12,000.
Major stock indexes surged to record highs on Thursday, a day after a jumbo rate cut from the Federal Reserve.
The S&P 500 and the Dow Jones Industrial Average both closed at fresh all-time highs, and the Nasdaq gained 2.5%.
The stock rally was led by AI stocks , with shares of Nvidia, Broadcom, ASML, and Meta were all up by about 4%.
Wedbush analyst Dan Ives said the tech rally owes it all to the Fed.
The rate cut was the "missing piece in the puzzle" and shows the "green light is back on for the tech growth trade into year-end and 2025," Ives said in a Thursday note.
On Wednesday, the Fed cut interest rates for the first time in four years, slashing its benchmark rate by 50 basis points. Major indexes surged after the announcement before paring those gains to close mostly flat.
Investors are feeling hopeful that the central bank has threaded the needle and will guide the US economy to a soft landing after years of fighting inflation while trying not to derail the labor market.
The Fed's dot plot shows the central bank will likely cut another 50 basis points this year and 100 basis points next year. The market is pricing in 75 basis points of cuts in the rest of the year, and between 100 and 150 next year, according to CME's FedWatch tool.
In his remarks after the Fed's policy meeting, Chair Jerome Powell made it clear that the central bank is focused on the labor market, even though it remains strong.
"The labor market is actually in solid condition. And our intention with our policy move today is to keep it there," Powell said in his remarks following the FOMC meeting.
Weekly jobless claims data affirmed his position, with claims from last week falling 12,000 to 219,000, according to Labor Department data released Thursday. The decline marks the biggest change in jobless claims in over a month.
Here's where US indexes stood at the 4 p.m. closing bell on Thursday:
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