Stocks surge a day after Federal Reserve's first interest rate cut since 2020

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Investors buoyed by Fed's outsized rate cut and data showing the U.S. economy remains on solid ground.

Stocks on Wall Street soared Thursday a day after the Federal Reserve slashed its benchmark interest rate by 0.50 percentage points, with investors cheering the central bank's move to head off a slowdown in U.S. economic growth. The Dow Jones Industrial Averages jumped 479 points, or 1.1%, as of 10:02 a.m. Eastern time to 41,982. The S&P 500 climbed 87 points, or 1.6%, while the tech-heavy Nasdaq jumped 2.3%.

The half-point move signals that the Fed is acting aggressively to keep the U.S. economy from stalling, given that historically most rate cuts are 0.25 percentage points. The rate cut will provide some relief to U.S. consumers struggling with high borrowing rates impacting credit cards, mortgages and auto loans.Stocks rose modestly immediately after the Fed's announcement that it was lowering rates for the first time since March 2020.

 

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