Stock market today: Dow rises 100 points after Fed’s historic 50 basis point rate cut
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Here are the most important news about stock trading on Wednesday:
History shows that the Fed’s rate cut is a gamble for stock market traders
The US economy is strong by one measure. Why the Fed will cut borrowing costs anyway
An alternative version of the S&P 500 has beaten its more popular sibling back to record highs
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Bitcoin rises after Fed cuts interest rates by 50 basis points
Bitcoin price rose 1.2% after the US Federal Reserve decided to cut its benchmark interest rate by half a percentage point, the first cut in over four years.
According to Dow Jones Market Data, the largest cryptocurrency is currently trading at around $60,475, still 18 percent below its record high of $73,798 reached in March.
U.S. stocks rose after the Federal Reserve cut its benchmark interest rate by 50 basis points to a range of 4.75 percent to 5 percent, the first rate cut in over four years and marking the start of a cycle of monetary easing in the world’s largest economy.
The Dow Jones Industrial Average rose more than 250 points, or 0.6%, to around 41,828 points at 2:03 p.m. Eastern Time, according to FactSet data.
The S&P 500 rose 0.8% to 5,673.
The Nasdaq Composite rose 0.9% to close at 17,796.
A small wave of refinancing has broken out among borrowers who had the highest mortgage interest rates over the past twelve months.
While lower 30-year fixed-rate mortgages can only help a small portion of the overall U.S. mortgage market, the Federal Reserve is expected to cut interest rates this afternoon for the first time in four years.
This has led to the development of a fund that invests in mortgage bonds – a backbone of US housing finance.
Here is the 8% return for investors betting on the real estate market
Home equity loans appear to be a good investment for investors, especially given rising yields amid the Fed’s interest rate cuts, says Clayton Triick of Angel Oak Capital Advisors.
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While Palantir shares rose only slightly in Wednesday trading, they could still pull off a remarkable feat: Any increase would be the ninth in a row, making it the stock’s longest winning streak in history, according to Dow Jones Market Data.
What has been driving the momentum in recent weeks? For one, the company has been winning AI deals and customers. The software company signed a “multi-year, multimillion-dollar deal” with Nebraska Medicine, which was announced earlier this week. Additionally, Palantir shares will be added to the S&P 500 on September 23 as part of the index’s rebalancing.
Palantir shares are often volatile, but are up 21.3% in the current price increase.
Bitcoin prices fell early Wednesday afternoon, ahead of the U.S. Federal Reserve’s expected first interest rate cut in four years.
The largest cryptocurrency was trading 2% lower at around $59,791, according to CoinDesk data. It is about 19% below its record high of $73,798 reached in March, while still up 42.3% year-to-date.
Investors will be closely watching whether the Fed cuts interest rates by 25 or 50 basis points, as the central bankers’ decision is expected to be announced at 2 p.m. Eastern Time.
US stocks traded in a narrow range and showed little change during the day as investors remained cautious about the US Federal Reserve’s interest rate announcement.
The S&P 500 fluctuated between slight gains and losses at around 5,635 points. The Dow Jones Industrial Average, meanwhile, was able to mitigate its earlier losses and the Nasdaq Composite was only slightly lower at around 17,625 points.
All three major stock indices were in the red ahead of Wednesday afternoon’s session, losing momentum from a slightly higher opening ahead of the upcoming Federal Reserve monetary policy update.
The Dow Jones Industrial Average lost 62 points, or nearly 0.2%, to around 41,544.
The S&P 500 fell 11 points, or 0.2%, to about 5,623.
The Nasdaq Composite lost 55 points, or 0.3%, to close at 17,573.
Apple shares rose 2.2 percent on Wednesday, making them the best-performing stock in the Dow Jones Industrial Average at last check in morning trading, according to FactSet data.
The Dow, a blue-chip stock index for the United States, lost 0.2 percent on Wednesday morning, according to data from FactSet.
One of the exchange-traded funds that tracks the communications services sector of the S&P 500 was on track for an all-time high at the close on Wednesday.
The Communication Services Select Sector SPDR Fund rose 0.2% to $87.91, on track for its record close based on data going back to 2018. That would be the fund’s first record close since July 10, when it closed at $87.79, according to Dow Jones Market Data.
The communications services sector of the S&P 500 has risen for eight straight sessions, putting it on track for its longest winning streak since Jan. 29, according to Dow Jones Market Data.
An indicator of stock market concern rose on Wednesday when the S&P 500 remained virtually unchanged in anticipation of the outcome of the US Federal Reserve’s meeting.
The Cboe Volatility Index rose more than 8% to around 19 at last check, according to FactSet data. As of Wednesday morning, the index is up about 15% so far this week.
The S&P 500 was unchanged at about 5,634 at last check, FactSet data show.
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