United States benchmark averages closed at fresh record highs on Thursday (Friday AEST), with small-cap stocks leading the charge, as investors bet the Federal Reserve’s shift toward easier monetary policy would bolster economic growth.
The Dow Jones Industrial Average rose 124 points or 0.3% to finish at 46,142.4. The S&P 500 advanced 31.6 points, or 0.5%, to close at 6,632.0, while the Nasdaq Composite jumped 209.4 points, or 0.9%, to settle at 22,470.7.
The Russell 2000, an index of smaller companies, outperformed, climbing 2.4% to an intraday record, its strongest showing since its last all-time closing high in November 2021.
All three major U.S. benchmarks also reached intraday records during the session, extending momentum from Wednesday’s volatile reaction to the Fed’s quarter-point rate cut.
Corporate news added fuel to the rally. Intel shares surged 22.8% after Nvidia said it would invest US$5 billion (A$7.72 billion) in the company to jointly develop data centre and PC chips.
The surge marked Intel’s best single-day performance in nearly 38 years. Nvidia’s stock also gained 3.5%.
The Federal Reserve’s policy shift remained the key driver for markets. While Chair Jerome Powell described the rate cut as “risk management”, traders interpreted the move as a pivot toward prioritising growth over inflation concerns.
The Fed’s projection of two additional cuts this year further strengthened optimism that borrowing costs will ease.
For the week so far, the Dow and S&P 500 are each up by 0.7%, while the Nasdaq has gained 1.5%.
On the data front, U.S. jobless claims fell by 33,000 to a seasonally adjusted 231,000 for the week ending September 13, below the 240,000 expected and easing from the prior week’s surge to 264,000, the highest level since October 2021.
On the bond markets, yields rose slightly, with the 10-year Treasury climbing 0.6% to 4.11% and the 2-year yield up 0.5% at 3.572%.
