Stock market today: Federal Reserve cuts interest rates by half a percentage point, stocks rise

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Interest Rates,Fed Officials,Nasdaq Composite

Investors digested the Fed's first interest rate cut since 2020.

Stocks rallied Wednesday afternoon after the Federal Reserve cut interest rates by 0.5% in its first rate reduction since 2020. Additionally, the Fed's latest Summary of Economic Projections showed the majority of Fed officials expect the central bank to cut interest rates by 100 basis points in total this year. The tech-heavy Nasdaq Composite rose about 0.5%, while the S&P 500 popped 0.3% and the Dow Jones Industrial Average was also up about 0.3%.

The significant policy shift was widely expected, given growing signs that the central bank has managed to cool inflation without severe harm to the economy. But investors were still guessing at whether hopes for a 0.5% cut would be fulfilled or if the historic pattern of 0.25% moves would repeat itself.

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