4:15pm: Tech rally lifts S&P 500, Nasdaq to record highs
A tech-driven rally pushed the S&P 500 and Nasdaq to record highs, as investors responded to the Federal Reserve’s latest interest rate cut and Donald Trump's election win.
The S&P 500 rose 0.7%, while the Nasdaq surged nearly 1.5%, boosted by gains in Nvidia and Amazon.
The Dow Jones Industrial Average held steady after a 1,500-point surge, its best day since 2022.
In the bond market, the 10-year Treasury yield eased, falling 8 basis points to 4.34%.
3:45pm: Market movers
Some big movers to the upside today in the markets.
Under Armour Inc (NYSE:UA) (Under Armour Inc (NYSE:UA)) shares leapt 30% to an 18-month high on the back of results coming in better than expected under new CEO Kevin Plank, despite falling sales.
The sportswear manufacturer upped its guidance for the year to next March, now expecting smaller losses than before.
And AppLovin Corp (NASDAQ:APP) (AppLovin Corp (NASDAQ:APP)) shares surged nearly 45% on Thursday, hitting a record high after the mobile advertising company reported impressive third-quarter earnings and a positive outlook for the fourth quarter.
2:35pm: A more neutral policy setting
As widely anticipated by money markets, the Federal Reserve cut the federal funds rate by 25 basis points at the November FOMC meeting, setting the target range at 4.50% to 4.75%.
"Such a cut marks the second step in the journey back to a more neutral policy setting, albeit a more modest one than the ‘jumbo’ 50bp cut seen last time around, and comes as policymakers continue to normalise policy, in an attempt to stick the ‘soft landing’ which the economy currently appears on course for," Michael Brown, senior research strategist at Pepperstone commented.
Brown's "base case remains that the Committee will continue to deliver 25bp cuts at every meeting, until a neutral rate, around 3%, is reached next summer."
But the risks, Brown noted, to this path have now become more two-sided since the election. If the labor market unexpectedly weakens and unemployment rises above the 4.4% forecast, a larger 50-basis-point rate cut could be reconsidered. Conversely, President Trump’s potential reflationary policies, such as tariffs, pose a hawkish risk if they increase inflation.
"It is, obviously, too early to say how significant this latter risk could prove, though in early-2025, the FOMC will likely need to take policy off its current ‘autopilot’ setting, and become considerably more nimble," Brown added.
2:15pm: Fed slashes rates
The Federal Reserve lowered its benchmark interest rate by 0.25 percentage points, setting a new target range of 4.5% to 4.75%.
The unanimous decision, made at the end of a two-day policy meeting in Washington, DC, came shortly after Donald Trump's presidential election victory.
12:45pm: Trump victory sparks optimism
The Nasdaq extended its gains on Thursday, led by Nvidia and Amazon reaching new highs.
Investor optimism is high following Donald Trump's electoral victory and anticipation of the Federal Reserve's policy decision later in the day.
Just after midday, the S&P 500 rose 0.6%, while the Nasdaq gained 1.4%, and the Dow Jones remained mostly flat after its 1,500-point surge on Wednesday, marking its best day since 2022.
Trump's win sparked record highs in all major stock indices, with expectations of corporate tax cuts and deregulation boosting economic growth. Investors are focused on the Fed's expected 25 basis point rate cut, with attention on Chairman Jerome Powell’s remarks about future policy direction.
On the corporate side, Arm Holdings saw a drop in stock value due to disappointing revenue forecasts, while Qualcomm’s shares rose over 4% after exceeding sales and profit expectations. Trump Media & Technology Group’s stock, which had surged after the election, fell by double digits.
11:10am: America First
Trump's victory has significantly impacted global financial markets, driving a surge in Treasury yields, record-high stocks, and a stronger dollar.
While asset prices were initially volatile, they have stabilized, with Treasury yields slightly falling, the dollar weakening, and US stocks rising moderately on Thursday.
"The win for Trump in the US is good for US stocks, with the S&P 500 and the mid cap Russell 2000 surging," XTB's Kathleen Brooks wrote.
"This has only exacerbated the performance gap between US equity indices and European and UK stock markets, as you can see below. We expect this to continue, as Trump’s America First policy plays out in global stock markets."
9.52am: Mixed start on Wall Street ahead of rate call
Wall Street enjoyed a calmer but albeit mixed start on Thursday as attention turned away from Donald Trump’s election victory and towards the Federal Reserve’s latest rate call.
The Nasdaq jumped 0.9% as trading got underway, alongside the S&P 500 by 0.4%, while the Dow Jones dipped just into the red after surging by 3.6% on Wednesday.
News of Trump’s win had spurred stocks on as investors speculated over the likes of tax cuts under the president-elect, though Thursday saw the Fed’s interest rate decision later in the day come into focus.
“Today’s Federal Open Market Committee meeting will shed light on the central bank’s next steps,” City Index analyst Fawad Razaqzada commented.
“Markets are betting on a rate cut, with most expecting a 25-basis-point reduction.
“Chair Powell may steer clear of any commitment to a rapid easing cycle, especially if he believes Trump’s policies could drive inflation.
“Any indication of hawkishness could boost bond yields further, which would likely weigh on growth stocks.”
Bond yields had surged on Wednesday as investors sold off government debt in response to Trump’s win, with the rate on ten-year treasuries scaling back below the 4.40% mark to 4.38% as New York opened.
7.50am: Stocks seen higher as Fed decision comes into focus
Wall Street looked set for a calmer day following Wednesday’s rally in the wake of Donald Trump’s election victory.
Futures had the Nasdaq up 0.4% ahead of Thursday’s opening bell, while the S&P 500 and Dow Jones were seen 0.3% and 0.2% higher respectively.
Each had rallied on Wednesday after Trump was confirmed as the US president-elect, with the Dow Jones having surged 3.6%, or by 1,508 points.
“Financials provided the brightest spot, with the combination of higher rates, a strong economy and favourable regulations expected to boost stocks in the sector,” Scope Markets analyst Joshua Mahony noted.
“Big tech managed to finish strongly, with Nvidia hitting record highs and overtaking Apple as the world’s largest company.”
As attention turned to the Federal Reserve’s base rate call on Thursday, caution appeared to have brought an end to the initial excitement following Trump’s win, he said.
Markets are expecting the central bank to cut US interest by 25 basis points, following a 50 basis point cut last time around in September.