November 22, 2024
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Dow, S&P 500, Nasdaq rise, Fed fires up rally

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Dow, S&P 500, Nasdaq rise, Fed fires up rally

U.S. stocks rose on Thursday amid hopes that the Federal Reserve’s jumbo interest rate cut would provide a “softer landing” for the U.S. economy.

The S&P 500 (^GSPC) rose roughly 1.5%, while the Dow Jones Industrial Average (^IXIC) rose more than 1%, with both trading near record highs. The tech-heavy Nasdaq Composite ( ^IXIC ) gained as much as 2.7%.

Stocks rallied as investors closely watched the central bank’s decision to kick off a new interest rate cycle with a 50 basis point cut. After Wednesday’s policy announcement, gauges fluctuated before closing lower.

Wall Street has absorbed Chairman Jerome Powell’s message — that deep cuts in a relatively strong economy will eventually stave off the risk of recession — and that’s a sign of optimism, not panic, about current conditions.

Bank of America now believes the Fed will cut rates to 0.75% by the end of the year, down from its previous forecast of 0.50%. By comparison, the Fed’s own “dot plot” indicates that policymakers expect a half-percentage-point cut.

Read More: What Fed Cuts Mean for Bank Accounts, CDs, Loans and Credit Cards

Rate-sensitive growth stocks rose in premarket trading, with big tech megacaps fueling this year’s rally. Alphabet ( GOOG ), Microsoft ( MSFT ) and Meta ( META ) all rose, while Apple ( AAPL ) added more than 3%. Tesla ( TSLA ) and Nvidia ( NVDA ) also rose.

After the Fed pivot, some in the market have returned to watching data releases because they limit potential volatility. Weekly Labor Department report Initial unemployment claims Thursday morning showed a four-month low. The number for the week ended September 19 was 219,000, a revision to 231,000, up 1,000 from the previous week’s total.

live8 updates

  • Bitcoin rises 6% to trade above $63,000

    Bitcoin (BTC-USD) rose more than 6% on Thursday to trade above $63,000 per token amid an overall market rally following the Federal Reserve’s jumbo rate cut.

    Increasing hopes of a ‘soft landing’ helped fuel Thursday’s rally, lifting cryptocurrencies along with other risk assets.

    Bitcoin is up more than 40% year-to-date, though the cryptocurrency remains volatile following its all-time high above $73,000 in mid-March.

    The token traded below $54,000 earlier this month.

  • Mortgage rates are close to 6% following Fed rate cuts

    Claire Boston of Yahoo Finance reports:

    Average 30-year fixed mortgage rates fell again this week to 6.09%, although the move was not directly linked to the Federal Reserve’s rate cut on Wednesday.

    The average rate fell 0.11 percent from a week earlier, leaving the average at its lowest level since early February 2023, according to Freddie Mac data released Thursday.

    Fifteen-year mortgage rates also fell to 5.15% from 5.27% a week ago.

    Read more here.

  • Bank stocks rise on Fed’s interest rate cut

    David Hollerith of Yahoo Finance reports:

    U.S. bank stocks rose on Thursday following a jumbo rate cut from the Federal Reserve, a sign of volatility among investors who expect the easing of monetary policy to boost Wall Street giants and smaller regional lenders.

    Goldman Sachs ( GS ), Capital One ( COF ) and Citigroup ( C ) rose more than 3% Thursday morning, followed by Wells Fargo ( WFC ), Bank of America ( BAC ), JPMorgan Chase ( JPM ), and Morgan Stanley (MS).

    Read more here.

    Bank stocks rose on Thursday following the central bank's rate cut. Bank stocks rose on Thursday following the central bank's rate cut.

    Bank stocks rose on Thursday following the central bank’s rate cut.

  • Unemployment is at its lowest in 4 months, a good sign for the job market

    Investors looking for signs of a “soft landing” pointed to the latest Initial unemployment claims The data showed jobless claims fell to their lowest level since May.

    The Labor Department reported 219,000 for the week ended Sept. 19, beating expectations for 230,000. The previous week’s total was revised up 1,000 to 231,000.

    A drop in initial jobless claims indicates that the labor market is better than expected.

    On Wednesday, the Federal Reserve cut interest rates by 50 basis points, raising questions about whether policymakers are opting for a bigger cut amid a weak job market.

    During Wednesday’s press conference, Federal Reserve Chairman Jerome Powell said the unemployment rate had risen, but remained relatively low at 4.2%. Powell described the economy as “fundamentally sound.”

  • Stocks are nearing session highs as technicals fuel the post-rate-cut price slide

    Stocks rose Thursday morning as the tech-heavy Nasdaq Composite ( ^IXIC ) led market gains following the Federal Reserve’s rate cut announcement in the previous session.

    The Nasdaq gained as much as 2.7% as tech stocks, which generally benefit from a low-interest rate environment, rose.

    The Dow (^DJI) rose more than 1% to hit an all-time intraday high, while the S&P 500 (^GSPC) hit a record in early trade.

    Tech stocks led market gains on Thursday. Tech stocks led market gains on Thursday.

    Tech stocks led market gains on Thursday.

  • Existing home sales fall in August amid low mortgage rates

    Existing home sales fell in August as house hunters were put on the sidelines, despite mortgage rates hitting their lowest level in a year.

    Existing home sales fell 2.5% from July to a seasonally adjusted annual rate of 3.86 million. National Association of Realtors Thursday, the lowest since October. Existing home sales are expected to hit 3.9 million in August, according to a poll by Bloomberg.

    On a year-over-year basis, sales of previously owned homes retreated 4.2% in August. The median home price rose 3.1% from last August to $416,700, the 14th straight month of annual price gains.

    A combination of scarce inventory, rising prices and elevated mortgage rates continues to weigh on sales activity — for now.

    “Home sales disappointed again in August, but the recent development of low mortgage rates and rising inventories is a powerful combination that should boost sales in the coming months,” NAR Chief Economist Lawrence Yun said in a press release. .

    However, economists Fannie Mae Don’t expect sales activity to pick up this year despite low mortgage rates.

    “We expect existing home sales to slow in 2024 to the slowest annual pace since 1995,” they said.

  • Growth-chasing Campbell Soup is battling private labels and big-name rivals

    Brooke DiPalma of Yahoo Finance reports:

    Companies are stepping up competition in grocery aisles, with products ranging from stuffing-flavored chips to ghost pepper chicken noodle soup.

    While retailers like Walmart ( WMT ) and Target ( TGT ) are pushing ahead with private labels, Campbell’s ( CPB ) is doubling down on innovation, marketing and increased distribution to sell popular brands like Goldfish.

    “It all comes down to … creating the right value [is] “It’s not just about one price point,” CEO Mark Clouse told Yahoo Finance last week at Campbell’s Investor Day. “It’s about how do we add value in different and sustainable ways?”

    Read more here.

  • Dow, S&P 500 hit intraday record highs as jumbo rate cut lifts stocks

    The Dow (^DJI) and S&P 500 (^GSPC) hit record highs on Thursday as investors digested the Federal Reserve’s announcement of a 50-basis-point rate cut earlier in the session.

    The S&P 500 rose nearly 1.7%, while the Dow gained more than 1%, both hitting record highs. The tech-heavy Nasdaq Composite ( ^IXIC ) gained more than 2.3%.

    Key averages were seen during the previous session following the central bank’s decision to cut rates.

    Gold (CG=F) hit an all-time high. Precious metals and other commodities rose as the dollar weakened.

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