Wall St jumps with tech stocks in the lead after Fed kicks off easing cycle
For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window.
S&P 500, Dow hit record highs
BofA expects Fed to go for 75-bp cut in Q4
US big banks rise after Fed's jumbo rate cut
Weekly jobless claims stand at 219,000
Indexes up: Dow 0.94%, S&P 500 1.29%, Nasdaq 2.15%
Updated at 09:46 a.m. ET/1346 GMT
By Johann M Cherian and Purvi Agarwal
Sept 19 (Reuters) - Wall Street rallied on Thursday with the S&P 500 hitting another intraday record high after the Federal Reserve kicked off its easing cycle with half-a-percentage point reduction and forecast more cuts were on the horizon.
Rate-sensitive growth stocks that have led much of this year's rally rose. MicrosoftMSFT.O added 2%,Tesla <TSLA.O> gained 4.2% and Apple AAPL.O advanced 2.6%.
Semiconductor stocks such as Nvidia NVDA.O rose 4.7%, while AdvancedMicro Devices AMD.O gained 3.5% andBroadcom AVGO.O added 3.8%, sending the Philadelphia SE Semiconductor Index .SOX up 3.6%.
The Russell2000 index .RUT also rose 1.7% with the broader market, as alower interest environment could meanlower operating costs and greater profits for credit-dependent companies.
At 09:46 a.m., the Dow Jones Industrial Average .DJI rose 391.24 points, or 0.94%, to 41,894.34, the S&P 500 .SPX gained 72.37 points, or 1.29%, to 5,690.63 and the Nasdaq Composite .IXIC gained 377.68 points, or 2.15%, to 17,955.01.
Nine out of the 11 S&P 500 sectors gained, led by tech stocks .SPLRCT with a 2.8% rise, while utilities .SPLRCU were the biggest laggards.
After delivering its super-sized verdict on Wednesday, theFed forecast rates to fall by another 50 bps by year-end and unveiled macroeconomic projectionsthat analysts say reflect a goldilocks scenario, where growth is steady and inflation and unemployment stay low.
Data on the day showed jobless claims for the week ended Sept. 14 stood at 219,000, lower than economists' estimates of 230,000.
"There's a delayed reaction to the Fed's rate cut ... the claims came in low, so it's only going to help fuel the idea that a soft landing is in play," said Ross Mayfield, investment strategist at Baird.
"The guidance for plenty more cuts by the end of 2025 should open up (rate-sensitive) sectors to reengage and expand."
Traders now see a 63.1% chance that the central bank will lower interest rates by 25 basis points at its November meeting, as per the CME Group's FedWatch tool.
BofA Global Research now anticipates a total of 75 bps rate cuts by the end of this year, compared with 50 bps forecast earlier.
Market reaction in the aftermath of the decision was muted, with all the three indexes closing slightly lower in the previous session.
However, data going back to 1970 from Evercore ISI showed the S&P 500 has posted an average 14% gain in the six months following the first reduction of a rate-cutting cycle.
September has generally been a disappointing month for U.S. equities with the S&P 500 .SPX notching an average loss of 1.2% since 1928.
Bank of America BAC.N and WellsFargo WFC.N advanced over 1% eachafter the big banks lowered their respective prime rates.
Citigroup C.N also rose 1.9%, sending the broader banks index .SPXBK 0.8% higher.
Among individual movers, fertility benefits management firmProgyny PGNY.O plunged 33% after a significant client notified the company it had elected to exercise a 90-day optionto terminate its services agreement.
Advancing issues outnumbered decliners by a 5.27-to-1 ratio on the NYSE and by a 4.71-to-1 ratio on the Nasdaq.
The S&P 500 posted 47 new 52-week highs and no new lows, while the Nasdaq Composite recorded 100 new highs and 24 new lows.
US inflation and interest rates https://reut.rs/4esuPHd
Reporting by Johann M Cherian and Purvi Agarwal in Bengaluru; Editing by Nivedita Bhattacharjee and Maju Samuel
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
