Wall Street soared to new record highs on Thursday following the Federal Reserve’s decision to cut interest rates. The S&P 500 surged 1.7%, the Dow Jones Industrial Average rose 1.3%, and the Nasdaq composite jumped 2.5%. Darden Restaurants saw an 8.3% increase in its stock after announcing improved sales trends and a delivery partnership with Uber. Nvidia also rose 4%, helping lift the S&P 500.
Markets worldwide experienced rallies after the Federal Reserve’s rate cut, which was the first in over four years. The move signaled a shift in focus from controlling inflation to supporting the job market and economy. Analysts were initially underwhelmed by the rate cut but were pleasantly surprised by the market’s positive reaction.
Despite concerns about rising inflation and uncertainty surrounding the upcoming U.S. presidential election, investors were buoyed by the prospect of lower interest rates. Some investment banks raised their forecasts for additional rate cuts, anticipating a more dovish approach from the Federal Reserve. Lower rates can stimulate borrowing and boost asset prices.
The economic landscape remains uncertain, with historical precedents offering limited guidance due to unique conditions. The bond market held steady, while stock markets in Europe and Asia also rallied. The FTSE 100 in London rose 0.9%, with the Bank of England holding interest rates steady. The Bank of Japan’s decision on rates is awaited on Friday. Wall Street’s significant gains reflect optimism about the impact of the Fed’s rate cut on the economy and markets.
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