US Markets Hit Record Highs as Fed Signals Further Rate Cuts
U.S. market’s main indexes reached intraday record highs on Thursday, following a quarter-point interest rate cut by the US central bank. Meanwhile, chipmaker Intel saw gains after Nvidia announced plans to acquire a stake in the company. Intel surged 29 percent, poised for its largest single-day increase since October 1987, following Nvidia’s announcement of a $5 billion investment in the beleaguered US chipmaker. Peer Advanced Micro Devices declined by 3.1 percent.
Nvidia rose 3.4 percent, recovering from losses on Wednesday following a report that suggested Chinese tech firms could halt purchases of its chips. Semiconductor stocks, including Applied Materials, Lam Research, and Micron Tech, rose between 4.5 percent and 7 percent, propelling a broader semiconductor index to a record high. The gains boosted the tech-heavy Nasdaq and the S&P 500 technology sector, rising by 1.6 percent. Three of the 11 S&P 500 sectors reached all-time highs. The small-cap Russell 2000 index rose 1.7 percent and is poised for a record close, as these companies tend to thrive in a low interest-rate environment. Federal Reserve Chair Jerome Powell highlighted the softening jobs market as a priority for the Fed following a widely anticipated 25 basis point cut on Wednesday, suggesting that further reductions may occur in upcoming meetings.
Data showed that investors are pricing in approximately 43.3 basis points in cuts by the end of 2025. “We only had one dissent … there’s more unity and discipline at the Fed, that strengthens its independence and is a very positive thing long-term for markets,” stated David Kelly. At 11:37 a.m., the Dow Jones Industrial Average increased by 163.03 points, or 0.35 percent, reaching 46,181.35. The S&P 500 rose by 44.35 points, or 0.67 percent, to 6,644.70, while the Nasdaq Composite climbed 250.05 points, or 1.12 percent, to 22,511.38. The S&P 500 energy and consumer staples sectors experienced the largest declines, falling by 0.4 percent and 0.5 percent, respectively. Data indicated that the number of Americans filing new applications for unemployment benefits decreased last week; however, the labor market has softened as both demand for and supply of workers have declined. “The economy is slowing but it is slowing slowly and so there isn’t any sign of imminent recession … the real issue with markets today is just how much good news is priced in,” said Kelly. The rate cut is anticipated to contribute to market’s recent rally.
The three indexes have gained in September, a month historically unfavorable for US equities, during which the S&P 500 has averaged a decline of 1.4 percent since 2000. CrowdStrike’s stock rose by 10 percent following price target increases from at least nine brokerages. Nucor fell 4.4 percent following the company’s announcement that it anticipates a decline in third-quarter profit across all three of its operating segments. On the NYSE, advancing issues outnumbered decliners by a ratio of 1.57-to-1, while on the Nasdaq, the ratio was 2.4-to-1. The S&P 500 achieved 28 new 52-week highs and six new lows, whereas the Nasdaq Composite noted 111 new highs and 30 new lows.
