Live Updates: Dow Soars 500 Points as Fed Rate Cut Sparks Market Rally
Follow live updates as the Dow surges 500 points and the S&P 500 hits new highs, fueled by the Fed's jumbo rate cut. Get the latest market news here.
US stocks made significant gains on Thursday, driven by increasing optimism that the Federal Reserve’s large interest-rate cut will lead to a "soft landing" for the US economy. The S&P 500 climbed by around 1.7%, while the Dow Jones Industrial Average surged over 500 points. Both indices are nearing record-high closing levels, with the Nasdaq Composite leading the charge with a 2.2% gain.
Investors have been analyzing the Fed's decision to begin its new rate-cut cycle with a 50-basis-point reduction. After Wednesday’s policy announcement, there was some fluctuation in the markets, but by Thursday, sentiment turned positive as traders began to absorb the Fed’s intentions. Federal Reserve Chair Jerome Powell emphasized that this rate cut, despite being substantial, is a move aimed at maintaining the strength of the economy, rather than responding to panic about current conditions.
Bank of America now anticipates that the Federal Reserve will implement a further rate reduction by 0.75% by the end of the year, revising its previous forecast of a 0.50% cut. This is slightly higher than the central bank’s own projections, which indicate policymakers expect a reduction of half a percentage point.
The rate cut provided a significant boost to growth stocks, particularly in the technology sector. Pre-market trading saw major tech companies like Alphabet, Microsoft, and Meta gaining approximately 2%. Apple saw an even bigger increase, rising over 3%, while Tesla and Nvidia climbed about 4%. These tech stocks have been leading the rally throughout the year, and Thursday's gains further solidified their positions.
Also Read: Intel Stock Surges on AI Chip Deal with Amazon and Foundry Business Overhaul
Amid the market’s recovery, some investors are closely watching economic data releases to gauge the potential for future volatility. Thursday’s report from the Labor Department showed that jobless claims fell to the lowest level in four months, coming in at 219,000 for the week ending September 19. This signals ongoing strength in the labor market, providing another layer of optimism for investors.
In the wake of the Fed’s actions, traders are now turning their attention to future economic developments, including how the labor market and inflation trends might influence the central bank’s next moves.
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Key Moments
- The Federal Reserve slashed interest rates by 50 basis points, initiating a new easing cycle.
- The Dow surged over 500 points, with the S&P 500 and Nasdaq also hitting significant gains.
- Major tech stocks like Alphabet, Microsoft, and Apple saw substantial increases following the Fed's rate cut.
- Initial jobless claims fell to a four-month low, reflecting a robust labor market.
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19 Sep 2024 12:29 PM
Mortgage Rates Edge Closer to 6% Following Federal Reserve's Rate CutMortgage rates have decreased slightly this week, with the average 30-year fixed-rate mortgage now at 6.09%. This drop, although modest, brings rates to their lowest point since early February 2023.
The decline of 0.11 percentage points from the previous week is not directly attributed to the Federal Reserve's recent rate cut but marks a significant shift. Additionally, the average 15-year mortgage rate fell to 5.15% from 5.27% last week, reflecting a broader trend in lower mortgage rates.
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19 Sep 2024 12:00 PM
Bank Stocks Surge as Federal Reserve's Rate Cut Boosts Investor Confidence
U.S. bank stocks experienced a significant boost on Thursday following the Federal Reserve's large interest rate cut. Investors are optimistic that this easing of monetary policy will benefit both major Wall Street banks and smaller regional lenders.
Goldman Sachs, Capital One, and Citigroup each saw their shares rise by over 3% in early trading. Other banks, including Wells Fargo, Bank of America, JPMorgan Chase, and Morgan Stanley, also saw smaller gains. This rally reflects growing confidence in the positive impact of the Fed's rate cut on the banking sector.
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19 Sep 2024 11:59 AM
Jobless Claims Drop to Four-Month Low, Indicating a Strong Job Market
Recent data on initial jobless claims shows a positive sign for the job market. For the week ending September 19, claims fell to 219,000, the lowest since May. This is better than the anticipated 230,000 and down from the previous week's revised 231,000.
This drop suggests that the job market is holding up well, even after the Federal Reserve's recent decision to cut interest rates by 50 basis points. Fed Chair Jerome Powell noted that while the unemployment rate has risen slightly to 4.2%, it remains relatively low, indicating that the economy is still robust.
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19 Sep 2024 10:57 AM
Tech Stocks Boost Market as Fed Rate Cut Sparks Rally
On Thursday, the stock market saw a strong boost, primarily driven by technology stocks, following the Federal Reserve's announcement of a rate cut. The Nasdaq Composite, which includes many tech companies, jumped as much as 2.7%, reflecting the positive impact of lower interest rates on tech stocks.
The Dow Jones Industrial Average rose over 1% and hit a new intraday high, while the S&P 500 also reached a record level in early trading. This market rally highlights how lower borrowing costs can benefit tech companies and lift overall market performance.
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19 Sep 2024 10:12 AM
Existing Home Sales Decline in August Despite Lower Mortgage Rates
In August, sales of existing homes decreased by 2.5% from July, reaching a seasonally adjusted annual rate of 3.86 million. This drop occurred even though mortgage rates are at their lowest in over a year. Analysts had anticipated sales would be around 3.9 million for the month.
Compared to last year, sales of previously owned homes fell by 4.2% in August. Meanwhile, the median home price rose by 3.1% to $416,700, marking the 14th consecutive month of price increases.
The ongoing issues of limited inventory, rising prices, and high mortgage rates are affecting sales. However, NAR Chief Economist Lawrence Yun noted that lower mortgage rates and increasing inventory might boost sales in the coming months.
Despite this, Fannie Mae economists predict that home sales will likely hit their lowest annual rate since 1995 by 2024.
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19 Sep 2024 10:09 AM
Campbell's Faces Tough Competition as It Focuses on Innovation and Brand Strength
Campbell Soup Company is stepping up its game to stay ahead in a crowded grocery market. With competition from private labels at major retailers like Walmart and Target, Campbell's is focusing on innovation and marketing to boost its brand appeal. From unique flavors like ghost pepper chicken noodle soup to creative snacks, the company is looking to stand out.
Campbell's CEO Mark Clouse emphasized the importance of creating value beyond just pricing. Speaking at the company's investor day, Clouse highlighted the need for differentiation and sustainability to meet consumer demands and fend off rivals.
