The Chipmakers rise on Thursday, boosting Nasdaqwhich becomes the most bullish index on Wall Street a day after the Federal Reserve to begin interest rate cuts with a movement of 50 bp, which doubled the forecasts of most analysts, who pointed to 25 bp.
Thus, Thursday’s session is leaving gains for large technology companies such as Nvidia (+4.6%), Broadcom (+3.9%), Intel (+1.7%), Arm (+3.9), ASML (+4.8%) or Micron (+1.7 %).
The rate cut carried out yesterday by the US central bank seems to have encouraged investors, and Michael Brownsenior research strategist at Pepperstone, said: “Stocks have surged overnight, with ‘green on the screen’ around the world, as buyers come to the fore once again.”
“In any case, Yesterday’s decision doesn’t seem like a game changer from a broader perspective“The Federal Reserve’s aggressive policy stance remains in place, and policymakers are clearly willing and able to act quickly with rate cuts should the economy continue to decline,” he added.
He also considered that investors have “little” information to carry out their operations, since “There was relatively little clarity about the pace at which rates will return to a neutral level.“.
“The problem here, for both policymakers and market participants, is that while the direction of travel – i.e. rate cuts – may be clear,the speed of the trip and the destination we are traveling to are unknown!“, he concluded.
How Wall Street is trading this Thursday, September 19
On Thursday, the New York Stock Exchange is steadily advancing towards records, as a delayed reaction of jubilation sweeps through markets around the world following theThe Federal Reserve’s big interest rate cut.
The S&P 500 is up 1.6% in early trading and above its all-time closing high set in July. The Dow Jones Industrial Average is up 502 points, or 1.2%, and on track to rise surpassing his record set on Monday. The Nasdaq Composite is up 2.3% as of 9:38 a.m. ET.
Smaller-company stocks helped lead the market, as did other companies that may feel the most relief from lower interest rates. The Russell 2000 index of smaller stocks jumped 2%. The moves followed gains in markets across Europe and Asia after the Federal Reserve delivered its first interest rate cut in more than four years on Wednesday.
It was a momentous step by the Fed, which closed the door to a bullish streak in which it maintained its main interest rate at a two-decade high in hopes of slowing the U.S. economy enough to end high inflation. Now that inflation has come down from its peak two summers ago, Chairman Jerome Powell He said the Fed can focus more on keeping the job market strong and the economy out of a recession.
Some investment banks raised their forecasts for how much the Federal Reserve will ultimately cut interest rates, anticipating an even deeper reduction than Fed officials. Federal Reserve officials on Wednesday released forecasts showing they expect to cut interest rates by potentially another 1.5 percentage points during 2024 and 2025. Bank of America, economists expect 2 percentage points.
Source: Ambito
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