Stock market today: Dow, S&P 500, Nasdaq surge as Fed fires up rally

Admin September 19, 2024

US stocks soared on Thursday amid growing optimism that the Federal Reserve’s jumbo interest rate cut will deliver a “soft landing” for the US economy.

The S&P 500 (^GSPC) climbed 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) led the gains, up 2.7%.

Stocks are rallying as investors take a closer look at the Fed’s decision to kick-start its new rate cycle with 50 basis point cut. After Wednesday’s policy announcement, the gauges swayed before closing lower.

Wall Street has absorbed Chair Jerome Powell’s message that a deep cut in a relatively strong economy will ultimately fend off the risk of recession — and is a sign of faith, not panic about current conditions.

Bank of America now believes the Fed will go on to cut rates by 0.75% by the end of the year, versus the 0.50% it previously forecast. By comparison, the central bank’s own “dot plot” indicates policymakers expect a half-percentage-point reduction.

Rate-sensitive growth stocks climbed in premarket trading, with Big Tech megacaps that fueled this year’s rally making gains. Alphabet (GOOG), Microsoft (MSFT), and Meta (META) all rose, while Apple (AAPL) added over 3%. Tesla (TSLA) and Nvidia (NVDA) also surged.

With the Fed pivot done, some in the market have returned to watching data releases as they brace for potential volatility. A weekly Labor Department report on initial jobless claims on Thursday morning showed a fall to the lowest level in four months. The figure for the week ended Sept. 19 came in at 219,000, while the prior week’s total was revised 1,000 higher to 231,000.

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Thu, September 19, 2024 at 6:50 PM GMT+2

Bitcoin surges 6% to trade above $63,000

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

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

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

Earlier this month the token was trading below $54,000.
Thu, September 19, 2024 at 6:22 PM GMT+2

Mortgage rates inch closer to 6% following Fed rate cut

Yahoo Finance’s Claire Boston reports:

Average 30-year fixed mortgage rates fell again this week to 6.09%, though the move wasn’t directly tied to the Federal Reserve’s rate cut on Wednesday.

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

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

Read more here.
Thu, September 19, 2024 at 5:29 PM GMT+2

Bank stocks rise on Fed rate-cut rally

Yahoo Finance’s David Hollerith reports:

US bank stocks surged Thursday following a jumbo rate cut from the Federal Reserve, a sign of bullishness among investors who now expect an easing of monetary policy will boost Wall Street giants and smaller regional lenders.

Goldman Sachs (GS), Capital One (COF), and Citigroup (C) each rose more than 3% Thursday morning, followed by smaller rises for 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.
Thu, September 19, 2024 at 5:17 PM GMT+2

Jobless claims the lowest in 4 months, a good sign for the jobs market

Investors looking for signs of a “soft landing” pointed to the latest initial jobless claims data, which showed jobless claims fell to the lowest level since May.

The Labor Department’s report for the week ending Sept. 19 came in at 219,000, versus expectations of 230,000. The prior week’s total was revised 1,000 higher to 231,000.

A fall in initial jobless claims signals the labor market may be holding up better than expected.

On Wednesday, the Federal Reserve cut interest rates by 50 basis points, raising questions about whether policymakers were opting for the bigger reduction amid a weakening jobs market.

During Wednesday’s press conference Fed Chair Jerome Powell highlighted the unemployment rate has moved up but is still relatively low at 4.2%. Powell described the economy as “basically fine.”
Thu, September 19, 2024 at 4:47 PM GMT+2

Stocks near session highs as tech fuels post-rate cut rally

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

The Nasdaq gained as much as 2.7% as technology stocks, which typically benefit from a lower interestrate environment, rose.

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

Tech stocks led the market gains on Thursday.
Thu, September 19, 2024 at 4:00 PM GMT+2

Existing home sales fall in August amid lower mortgage rates

Sales of existing homes fell in August as house hunters remained on the sidelines despite mortgage rates hitting their lowest level in over a year.

Existing home sales dropped 2.5% from July to a seasonally adjusted annual rate of 3.86 million, the National Association of Realtors said Thursday, the lowest level since October. Economists polled by Bloomberg expected existing home sales to hit a pace of 3.9 million in August.

On a yearly basis, sales of previously owned homes retreated 4.2% in August. The median home price increased 3.1% from last August to $416,700, the 14th consecutive month of annual price increases.

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

“Home sales were disappointing again in August, but the recent development of lower mortgage rates coupled with increasing inventory is a powerful combination that will provide the environment for sales to move higher in future months,” NAR chief economist Lawrence Yun said in a press release.

However, economists at Fannie Mae don’t expect sales activity to turn around this year despite lower mortgage rates.

We “expect 2024 existing home sales to fall to the slowest annual pace since 1995,” they said.
Thu, September 19, 2024 at 3:54 PM GMT+2

Growth-chasing Campbell Soup is in for a fight against private labels and big-name rivals

Yahoo Finance’s Brooke DiPalma reports:

With products from stuffing-flavored chips to ghost pepper chicken noodle soup, companies are ramping up the competition in the grocery aisles.

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

“It all comes down to … creating the right value, which [is] not dependent solely on a price point,” CEO Mark Clouse told Yahoo Finance at Campbell’s investor day last week. “It is about how do we add value in ways that are more differentiated and sustainable?”

Read more here.
Thu, September 19, 2024 at 3:31 PM GMT+2

Dow, S&P 500 jump to intraday record highs as stocks soar on jumbo rate cut

The Dow (^DJI) and the S&P 500 (^GSPC) touched record highs on Thursday as investors digested the Federal Reserve’s announcement during the prior session — a 50 basis point rate cut.

The S&P 500 climbed roughly 1.7%, while the Dow rose more than 1%, both reaching record highs. The tech-heavy Nasdaq Composite (^IXIC) led the gains, up more than 2.3%.

The major averages seesawed during the prior session following the Fed’s decision to cut rates.

Gold (CG=F) hovered near all-time highs. The precious metal and other commodities climbed as the dollar declined.