All three major Wall Street indices finished at all-time highs for a second straight day on Thursday, led by the Dow Jones Industrial Average, which rose almost 0.7%.
The Federal Reserve said Wednesday it still saw three cuts to US borrowing costs in 2024 after voting to hold interest rates at a 23-year high.
Analysts said the gains partly reflected market relief after the Fed’s rate cut predictions.
But equally as important, there is just as “much excitement about this market” due to the strength of economic fundamentals, said Art Hogan of B Riley Wealth, citing buoyant existing home sales data published Thursday as further corroboration of a solid economic outlook.
The day’s gains came despite a 4.1% drop in Apple shares after the US department of justice confirmed it was suing the company over allegations it illegally maintained a monopoly for its iPhone by stifling competition and imposing exorbitant costs on consumers.
But Apple’s fall was countered by a flourishing trading debut for social media company Reddit, which soared 48% after pricing at the top of its range in an initial public offering (IPO).
Reddit’s robust performance lifted expectations of other IPOs, benefitting large banks, including Goldman Sachs, which jumped 4.4%.
England and Norway pause
Following the Fed, the Bank of England and Norway’s Norges Bank similarly held rates steady on Thursday, but also suggested they could soon cut should inflation continue to ease.
“Like the US Federal Reserve yesterday, BoE policymakers appear keen to validate financial market expectations of rate cuts starting in summer,” said Kallum Pickering, senior economist at Berenberg Bank.
And the Swiss National Bank (SNB) on Thursday became the first major central bank to cut rates since the end of the current global tightening cycle, claiming the battle against inflation was working.
In European stock markets, Frankfurt and Paris reached new all-time peaks before pulling back. London gained almost 2%.
Asian markets finished mostly higher, with Japan’s Nikkei and the Hong Kong Hang Seng Index rising sharply, while the Shanghai composite edged lower.
Among commodities, gold hit a fresh record of US$2,220 an ounce, before retreating, as US rate cuts could weigh on the dollar. And oil continued to slide on profit taking after hitting a five-month high earlier this week.
Key figures around 1640 GMT
New York – Dow: UP 0.7% at 39,781.37 points (close)
New York – S&P 500: UP 0.3% at 5,241.53 (close)
New York – Nasdaq Composite: UP 0.2% at 16,401.84 (close)
London – FTSE 100: UP 1.9% at 7,882.55 (close)
Paris – CAC 40: UP 0.2% at 8,179.72 (close)
Frankfurt – DAX: UP 0.9% at 18,179.25 (close)
EURO STOXX 50: UP 1% at 5,052.31 (close)
Tokyo – Nikkei 225: UP 2% at 40,815.66 (close)
Hong Kong – Hang Seng Index: UP 1.9% at 16,863.10 (close)
Shanghai – Composite: DOWN 0.1% at 3,077.11 (close)
Euro/dollar: DOWN at US$1.0861 from US$1.0923 on Wednesday
Dollar/yen: UP at 151.65 yen from 151.36 yen
Pound/dollar: DOWN at US$1.2653 from US$1.2782
Euro/pound: UP at £85.82 pence from £85.44 pence
West Texas Intermediate: DOWN 0.2% at US$81.07 per barrel
Brent North Sea Crude: DOWN 0.2% at US$85.78 per barrel