S&P 500 Hits Record on Fed Rate Cut – US Market Wrap

Wall Street traders betting that the Federal Reserve will be able to engineer a soft landing fuelled a rally in riskier market sectors, with stocks reaching all-time highs.

The S&P 500 rose 1.7%, setting a 39th record in 2024 and extending this year’s surge to around 20%. Technology led gains, while defensive industries underperformed. The Nasdaq 100 gained 2.6%, while the Russell 2000 of small caps rose for the seventh consecutive session. Bitcoin rose 5%. Treasuries were mixed, with shorter maturities outperforming longer ones. The dollar fell.

The Fed’s bold start to cutting interest rates, combined with its determination not to fall behind the curve, has reignited hopes that the central bank will be able to avoid a recession. Data released Thursday showed that jobless claims fell to their lowest level since May, indicating that the labor market remains healthy despite a slowdown in hiring.

The yield on 10-year Treasuries rose two basis points to 3.72 percent. The pound rose after the Bank of England held interest rates steady and said it would not rush to ease policy. The yen weakened ahead of the Bank of Japan’s policy decision.