Stock markets reach record highs after Federal Reserve rate cut

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U.S. stock markets closed at record highs on Thursday, following the Federal Reserve’s decision to cut interest rates by half a percentage point, the first cut of this size since the onset of the COVID-19 pandemic. The Dow Jones Industrial Average rose by 522 points, a 1.3% increase, setting a new record. The S&P 500 also hit an all-time high, climbing 1.7% to over 5,700 points, while the Nasdaq Composite surged by 2.5%.

The rate cut, larger than the anticipated quarter-point reduction, is expected to alleviate economic pressure on consumers and businesses, according to analysts. Technology stocks saw notable gains, with Tesla up by 7.4%, Meta Platforms rising 3.9%, and Apple shares increasing by 3.7%.

Federal Reserve Chairman Jerome Powell explained the decision by pointing to the strong job market and overall health of the U.S. economy, while cautioning that future rate cuts may not be as significant. “The U.S. economy is in good shape. It is growing at a solid pace. Inflation is coming down,” Powell said.