The U.S. stock market continues to soar after the Federal Reserve announced its second consecutive interest rate cut, marking a significant decrease from the high rates just a few months ago. This move contributed to all three major indexes reaching record highs during Thursday’s trading session.
The Fed’s decision to lower the benchmark fed funds rate is part of a strategy to support economic growth, and investors responded positively to the news. Specifically, the Dow closed at 43,729.34, the S&P 500 ended at a record high of 5,973.10, and the Nasdaq finished at a record level of 19,269.46.
Following the rate cut, the 10-year Treasury yield experienced fluctuations, reflecting concerns over potential inflation due to President-elect Donald Trump’s proposed policies. While the yield initially spiked, it ultimately decreased after the Fed’s announcement.
Federal Reserve Chairman Jerome Powell expressed optimism about the economy, hinting at future rate cuts but emphasizing that the pace would depend on economic data. Economists noted the potential impact of Trump’s policies on economic growth and inflation, speculating about the Fed’s future decisions regarding interest rates.
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In addition to the Fed’s announcement, this week also saw several companies releasing their earnings reports. Highlights include Pinterest surpassing revenue and earnings expectations but offering a cautious outlook for the fourth quarter, Rivian missing third-quarter estimates and revising its full-year earnings forecast, and Airbnb beating sales estimates but falling short on earnings projections.
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