The U.S. stock market reached new heights on Thursday as investors eagerly awaited potential interest rate cuts from the Federal Reserve. The S&P 500 surged 1% to achieve its 16th all-time high of the year, with the Dow Jones Industrial Average also rising by 0.3% and the Nasdaq composite coming close to its record high with a 1.5% jump.
Federal Reserve Chair Jerome Powell hinted at the possibility of interest rate cuts in his testimony on Capitol Hill, stating that the central bank is close to making the move pending further data on inflation. This news was well-received on Wall Street, as rate cuts could provide a boost to the economy and investment prices.
Concerns were raised about the timing of the rate cuts, with Powell acknowledging the risks of acting too late or too early. Treasury yields eased in response to reports indicating lower inflation pressure, with the 10-year Treasury yield falling to 4.08%.
In addition to domestic factors, traders were also monitoring the European Central Bank’s stance on interest rates and upcoming economic reports. The job market update scheduled for Friday morning was particularly anticipated, as it could influence the Fed’s decision on rate cuts.
Stocks of companies like Kroger and Nvidia saw significant gains, while Victoria’s Secret faced a decline despite reporting strong profits. Embattled New York Community Bancorp also made headlines with a significant investment announcement and dividend cut.
Overall, the S&P 500 closed at 5,157.36, the Dow Jones at 38,791.35, and the Nasdaq composite at 16,273.38. International markets also saw positive movements, with European indexes rising and Japan’s Nikkei 225 briefly reaching a record high before a slight decline.
The anticipation of interest rate cuts and positive economic indicators have contributed to the momentum building on Wall Street, with investors closely watching for further developments in the coming weeks.
