Major U.S. indices closed higher on Thursday, with the Nasdaq marking one of its strongest performances of 2024 as tech stocks rallied following the Federal Reserve's first interest rate cut since 2020.
The Dow Jones Industrial Average added 522.1 points or 1.3% to 42,025.2, the S&P 500 lifted 95.4 points or 1.7% to 5,713.7 and the Nasdaq Composite surged 440.7 points or 2.5% to 18,014.
Among individual companies, Tesla led the charge with a 7.4% gain, while Nvidia jumped 4%, pushing the tech-heavy index up by 2.5%.
Lower interest rates often benefit tech stocks by reducing borrowing costs and making high-risk investments more attractive. Along with the Fed's 50-basis-point cut, the Federal Open Market Committee signaled additional rate reductions, hinting at a total of 50 more basis points of cuts by year-end, with a potential 2% decrease over time.
Other tech chipmakers also benefitted from the market rally, with Apple and Meta both climbing nearly 4%, while Advanced Micro Devices (AMD) climbed 5.7% and Broadcom gained 3.9%.
Despite AMD's efforts to challenge Nvidia in the AI space, it remains significantly behind, with its stock only up about 6% this year.
On the bond markets, the 10-year Treasury yield stood at 3.719%, while the 2-year yield was at 3.588%.
