By Krystal Hur, CNN
New York (CNN) — Stocks jumped Thursday morning as investors cheered the Federal Reserve’s eye-popping half-point interest rate cut.
The Dow rose 537 points, or 1.3%. The S&P 500 gained 1.6%, topping the 5,700 level. The Nasdaq Composite added 2.3%.
Tech stocks surged: Nvidia shares popped 4%, Tesla shares gained 2.6%, Meta Platforms shares rose 2% and Apple shares climbed 2.2%.
The Fed on Wednesday cut rates by half a point, marking its first rate cut since the onset of the Covid pandemic and bringing rates down from a 23-year high. The move was larger than the smaller, more conservative quarter-point cut that some investors expected from the central bank.
The Fed’s latest decision reflects its shift from tamping down inflation to the other part of its dual mandate: maximizing employment. Fed Chair Jerome Powell told reporters on Wednesday that he believes the job market and economy are both on solid footing. But he cautioned that the labor market is no longer as strong as it was before the Covid pandemic.
“The Fed took out an insurance policy against further labor market weakening,” wrote Ronald Temple, chief market strategist at Lazard, in a Wednesday note.
Powell warned that investors shouldn’t expect half a point to be the pace at which the Fed cuts rates going forward. Officials penciled in more rate cuts for 2024 in their latest economic forecasts released Wednesday, up from the single cut they previously forecast for this year. Central bankers expect unemployment to rise to 4.4% this year from August’s 4.2% rate.
Elsewhere, gold futures rose, inching closer to a fresh record high reached Wednesday.
The-CNN-Wire
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