Wall Street Skyrockets: Markets Soar After Federal Reserve’s Bold 50 Bps Rate Cut | World News
US Stocks Surge as Fed Cuts Interest Rates by 50 Basis Points
Last Updated: Sep 19, 2024 | 12:16 AM IST
US stocks soared on Wednesday following a significant move by the Federal Reserve to cut interest rates by 50 basis points, marking its first reduction in over four years. The decision came as the Fed expressed growing confidence that inflation is nearing its 2% target, shifting its focus to maintaining a robust labor market.
Brian Jacobsen, Chief Economist at Annex Wealth Management, highlighted the strength of the Fed’s signal. "The Fed ended the pause with a bang. A 50 basis point cut indicates their expectation for an additional 50 basis points of cuts this year," he noted. The Fed anticipates that by front-loading these rate cuts, it can achieve an unemployment rate of 4.4% and quickly bring inflation to target levels.
Market expectations had been volatile, with the likelihood of a rate cut fluctuating sharply. According to CME’s FedWatch Tool, the probability of a 25 basis point cut shifted from 65% last week to 57% for the larger 50 basis point cut earlier on Wednesday.
The major indexes reflected this optimism: the Dow Jones Industrial Average climbed 165.62 points (0.40%), reaching 41,771.80. The S&P 500 rose by 29.06 points (0.52%) to settle at 5,663.64, while the Nasdaq Composite increased by 139.26 points (0.79%) to 17,767.32. Small-cap stocks, represented by the Russell 2000, also benefitted, advancing over 1%.
This year’s market rally has seen record highs across the major indexes, driven by expectations of lower interest rates amid moderating inflation and a gradually cooling jobs market.
First Published: Sep 18, 2024 | 9:45 PM IST
Original Story https://www.business-standard.com/world-news/wall-street-subdued-as-investors-await-fed-decision-with-bated-breath-124091801494_1.html
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