Updated Dec. 14, 2023 4:37 pm ET
Stocks extended their year-end rally. The S&P 500 rose 0.3%, Nasdaq Composite added 0.2%, Dow Jones Industrial Average was up 0.4%, closing at a new record high.
Investors have recently been betting that the Fed will pivot to lowering interest rates next year, and the central bank helped confirm that view Thursday by forecasting three rate cuts in 2024.
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Global stocks pushed higher on Thursday, building on the gains seen the previous day following a rate cut from the U.S. Federal Reserve, according to the Wall Street Journal (WSJ).
The gains were led by the U.S. with the S&P 500 Index gaining 1%, also boosted by strong economic data from the U.S. and signs of stabilization in the U.K. economy. Other major global markets such as the FTSE 100 in London and the DAX in Germany were also up.
The Dow Jones Industrial Average rose a further 0.8% to close above a technical level of 25,000. The Ship S&P 500 and Nasdaq Composite added 1.1% and 1%, respectively.
In Asia, the Nikkei 225 ended the day 0.4% higher, while the Hang Seng Index in Hong Kong added another 0.9%.
The rally was largely supported by gains in the technology sector, including electronic chipmakers and software producers, while the housing and construction sectors also rose. Financials, retailers, and healthcare providers also extended their gains.
Oil prices jumped following the rate cut, which could help drive global economic growth, with Brent crude up 1.8% to $60.29 and U.S. crude gaining 2.4% to $57.12. Gold also rose 0.2% higher.
The Federal Reserve’s surprise factors cut on Wednesday in the benchmark federal funds rate sent stocks soaring, with the Dow Jones Industrial Average gaining almost 350 points, or 1.41%.
The rate cut made by the Fed was the first in more than a decade and was designed to ward off the potential economic risk from global trade wars, slowdowns in Europe and Japan and a simmering dispute over the U.K.’s exit from the European Union.
The stock market’s rally signals to investors that the Fed’s rate cut is providing some confidence that the U.S. economy remains on track for growth.
