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Stocks rose Thursday as traders digested the Federal Reserve’s Wednesday decision to lower interest rates by a half percentage point.
The Dow Jones Industrials index ballooned 423.7 points, or 1%, to 41,926.80.
The S&P 500 piled on 90.01 points, or 1.6%, to 5,708.27.
The NASDAQ jumped 442.25 points, or 2.5%, to 18,015.91.
Traders got some validation that the Fed was engineering a soft landing for the economy on Thursday as weekly jobless claims fell by 12,000 to 219,000, which was far below estimates.
Tech stocks rallied as the rate cut spurred investors to return to a risk-on mood. Nvidia and AMD shares popped around 5% and 4%, respectively. Micron Technology traded more than 2% higher. Other big tech stocks such as Meta advanced 2.4%, and Alphabet grew 1.9%.
Stocks leveraged to lower rates spurring the economy also jumped Thursday morning. Financial giant JPMorgan Chase rose 0.8%. Industrial stock Caterpillar tallied 2.6%, and Home Depot gained 1.5%.
The Fed slashed its overnight lending rate to a range of 4.75% to 5% from 5.25% to 5.5% on Wednesday, which came as a surprise to some investors who criticized the size of this initial cut. This is the first rate reduction delivered by the Fed in four years.
Prices for the 10-year Treasury sagged, lifting yields to 3.74% from Wednesday’s 3.71%. Treasury prices and yields move in opposite directions.
Oil prices took on 56 cents to $71.42 U.S. a barrel.
Gold prices nosed up 10 cents to $2,598.70.
