Wall Street ended Thursday’s session with the main indexes to appreciate more than 1%. Behind this rise was the 50 basis point interest rate cut by the US Federal Reserve (Fed), but also the decrease in the number of unemployment benefit claims in the country. The combination of these factors eased fears about a possible economic recession in the US.
The S&P 500 rose 1.7% to 5,713.64 points, a record closing high. During the session, it set a new all-time high – your 39th record in 2024 – at 5,733.57 points and extended this year’s growth to around 20%. The Nasdaq Composite recorded the biggest rise, 2.51% to 18,013.98 points, while the Dow Jones advanced 1.26% to 42,025.19 points.
The Fed’s bold start to cutting interest rates – its first in four years – rekindled hopes that the central bank will be able to avoid a recession. But the data released this Thursday also showed a unemployment benefit claims drop to lowest level since Mayhaving signaled that the labor market remains healthy, despite a slowdown in hiring.
Jonathan-Cohn of Nomura Securities International told Reuters that “the jumbo cut appears to have increased the perception of the likelihood of a soft landing,” referring to economists’ ideal scenario in which inflation cools without triggering a recession.
The number of people filing for unemployment benefits in the US fell by 12,000 from the previous week to 219,000 in the period ending September 14, significantly below market expectations of 230,000 jobless claims.
“Despite some volatility following the Fed’s cut, the S&P 500’s uptrend remains intact,” Fawad Razaqzada of City Index told Bloomberg. “The Fed’s decision to deliver a 50 basis point rate cut was broadly welcomed by investors. The move was seen as a bold but necessary step to ease economic concerns without sending panic signals reminiscent of the 2008 financial crisis,” he said.
In terms of the main market movements, Tesla stood out positively, advancing more than 7%, driven mainly by the easing of monetary policy announced during Wednesday afternoon.
Reaping the fruits of a cut in the key rates were also the technological heavyweights, which closed the session up more than 1%. Among “big tech”, Nvidia appreciated 3.97%, Meta advanced 3.93%, Apple grew 3.71%, Amazon rose 1.85%, Microsoft gained 1.83% and Alphabet accelerated 1.51%.
Source: www.jornaldenegocios.pt
