Record Highs for S&P 500 and Nasdaq Following Fed's Rate Cut

U.S. stock index futures soared to new heights on Thursday, driven by the S&P 500 and Nasdaq's unprecedented surge following the Federal Reserve's announcement of a quarter-point interest rate cut. This move marked the first rate reduction by the central bank this year.

Federal Reserve Chair Jerome Powell highlighted the significance of a softening jobs market as a priority for the central bank, hinting at potential additional cuts during the forthcoming October and December meetings. Investors forecast a further 44.6 basis points cut by the end of 2025, suggesting two quarter-point cuts, according to data compiled by LSEG.

Despite these developments, Powell indicated that aggressive rate cuts were not imminent, describing the move as a risk-management strategy. This restraint led to a decline in the S&P 500 and Nasdaq, even as Nvidia's stock faced pressure amid reports of Chinese tech firms considering halting their purchases. The Federal Reserve's decision is anticipated to further fuel Wall Street's ongoing rally.