S&P 500, Nasdaq, and Russell 2000 Jump Between 1.5% and 2.5%

Barry Adams
19 Sep, 2024
New York City

Investors returned to add stock positions on Thursday after the Federal Reserve lowered rates for the first time in over four years. 

The S&P 500 index and the Nasdaq Composite jumped more than 1.5% in the hopes that the Federal Reserve's efforts to engineer a so-called "soft landing" are likely to succeed, where the central bank manages to cool the economy and moderates inflation without causing a recession. 

Investors, in a delayed reaction to the Fed's jumbo-sized rate cut of 50 basis points, bid up tech stocks, home builders, and small-cap names. 

The Fed cut its fed funds rate to a range between 4.75% and 5.0% from the 5.25% to 5.50%, and the amount of rate cut surprised investors. 

Initial jobless claims for the week ending on September 14 declined 12,000 to 219,000, the U.S. Department of Labor reported on Thursday. 

Initial claims were the lowest since May 18, and continuing claims, which lag by a week, edged lower to 1.829 million. 

 

U.S. Indexes and Treasury Yields

The S&P 500 index increased 1.6% to 5,708.29, the Nasdaq Composite rose 2.3% to 17,973.09, and the Russell 2000 index advanced 1.4% to 2,238.17. 

The yield on 2-year Treasury notes edged lower to 3.63%, 10-year Treasury notes inched up to 3.76%, and 30-year Treasury bonds inched lower to 4.09%.

WTI crude oil decreased $0.76 to $71.63 a barrel, and natural gas prices edged down 3 cents to $2.25 a thermal unit.

Gold rose by $16.57 to $2,565.78 an ounce, and silver increased by $0.18 to $31.03.

The dollar index, which weighs the US currency against a basket of foreign currencies, edged higher to 100.95.

 

U.S. Stock Movers

Home builders jumped after the Federal Reserve lowered rates by 50 basis points in the hopes that lower mortgage rates will spur demand for new homes. 

Lennar Corp. jumped 0.9% to $190.29, NVR Homes gained 1.7% to $9,624.67, KB Home gained 1.9% to $88.31, Toll Brothers added 1.4% to $152.02, PulteGroup inched higher 0.6% to $141.88, and DR Horton added 0.9% to $195.97. 

Chipmakers and artificial intelligence stocks rallied after lower interest rates spurred investors to return to high-growth stocks. 

AMD increased 4.2% to $154.55, Apple gained 3% to $227.27, Alphabet increased 1% to $162.54, Microsoft advanced 1.5% to $437.12, and Nvidia jumped 4.5% to $118.41. 

SLB increased 2.1% to $42.27 after the company announced a partnership with Nvidia to develop AI modes for subsurface exploration and operations and data management. 

Steelcase declined 11% to $12.56 after the office furniture maker reported weaker-than-expected quarterly results. 

Revenue in the second quarter stood at $855.8 million, and the company forecast a third-quarter revenue range between $785 million and $810 million, lower than the previous upper range of $812.1 million. 

Darden Restaurants jumped 7.4% to $170.86, and the company announced weaker-than-expected quarterly results because of the weakness in its fine dining restaurants. 

The parent company of Olive Garden reported revenue in the fiscal first quarter decreased 1% to $2.76 billion, net income rose to $207.2 million from $194.5 million, and diluted earnings per share advanced to $1.74 from $1.59 a year ago. 

Same store sales at Olive Garden declined 2.9%, and the company said it is reviving its Never Ending Past Bowl later this month in the hopes of attracting more customers. 

Despite the weakness in the current quarter, the company reiterated its full-year sales forecast between $11.8 billion and $11.9 billion and earnings per share from continuing operations between $9.40 and $9.60.