The S&P 500 and the Nasdaq both closed at all-time highs for a second straight day
Shares on Wall Street scaled record highs on Thursday, while US Treasury yields retreated further after the Fed cut interest rates and as investors digested a second Donald Trump presidency.
The Fed reduced rates by 25 bps on Thursday, as expected, noting that the job market has generally eased while inflation is moving toward its 2% target – saying price pressures had “made progress,” compared with prior language that it had “made further progress.”
The Fed didn’t rock the boat, said Ryan Detrick, chief market strategist at Carson Group. The big question now is will they cut again in December? Our best guess is they do, as inflation continues to improve.
The S&P 500 gained 0.74%, the DJIA was flat, and the Nasdaq Composite climbed 1.5%. The S&P 500 and the Nasdaq both closed at all-time highs for a second straight day. The MSCI index for world stocks jumped 0.9%, also to a record high.
Europe’s broad STOXX 600 index gained 0.6% after Asian shares rose earlier in the day, with onshore Chinese blue chips adding 3% as investor optimism over potential stimulus outweighed concerns about worsening trade tensions.
Stocks are rewarding the presumed likelihood of corporate tax cuts and perceiving a general penchant toward deregulation across industries as positive for earnings, said Naomi Fink, chief global strategist at Nikko Asset Management.
Treasury yields extended declines after the Fed’s rate cut, though some investors warned that rates may not drop as steadily as some might have expected under a second Trump administration.
A Republican sweep seems very likely, and looser fiscal policy as well as trade tariffs might lift not only growth but also inflation, according to Matthias Scheiber, global head of portfolio management at Allspring Global Investments Systematic Edge Team.
The benchmark 10-year yield was last at 4.3355%, down 9 bps on the day, after a 14 bp rise on Wednesday, and the 30-year yield was last at 4.5393%, down more than 6 basis points after the previous day’s 15 bp jump.
