Stocks surged with major indices reaching new highs on aggressive Fed rate cuts

From Nasdaq: 2024-09-19 20:26:41

Stocks rallied Thursday with the S&P 500, Dow Jones, and Nasdaq 100 closing up +1.70%, +1.26%, and +2.56% respectively, hitting new highs. The Fed’s -50 bp rate cut and projected cuts this year bolstered market sentiment. Weekly US jobless claims fell more than expected, reinforcing expectations of future rate cuts. European government bond yields rose. Eurozone car registrations fell -18.3% y/y.
In the US, the Philadelphia Fed business index rose and existing home sales fell to a 10-month low. Expectations are at 100% for a -25 bp rate cut at the November FOMC meeting, with a 44% chance of a -50 bp cut. Overseas markets settled higher, with the Euro Stoxx 50, Shanghai Composite, and Japan’s Nikkei climbing to new highs.
Interest rates saw T-notes fall to a 1-1/2 week low, with the 10-year T-note yield at 3.728%. European government bond yields rose, impacting T-notes. The Bank of England voted to keep rates steady, emphasizing the need for low inflation. The ECB may cut rates at a 27% chance for the October 17 meeting.
Tech stocks advanced significantly Thursday with many major companies gaining 3-5%, boosting the market overall. Chip companies like AMD, ASML, and KLA Corp led the gains. Megacap tech stocks like Tesla, Apple, and Meta Platforms also rallied. Home building stocks rose, led by PulteGroup, following the recent Fed rate cut.
In the US, Darden Restaurants surged +8% after improvements in sales trends. Utility stocks declined due to higher bond yields, with American Electric Power, Consolidated Edison, and Duke Energy down over -1%. FactSet Research Systems rose +4% after reporting strong Q3 adjusted EPS. Mobileye surged over +14% after Intel clarified it had no plans to divest.



Read more at Nasdaq: Stocks Finish Sharply Higher as Aggressive Fed Rate Cuts Bolster Economic Optimism