U.S. Stocks Surge Following Fed Rate Cut and Trump’s Election Victory

U.S. stocks rose on Thursday after the Federal Reserve lowered interest rates, building on the positive momentum from Donald Trump’s recent election win. The S&P 500 and Nasdaq reached all-time highs, while the Dow stayed mostly unchanged.

Market Performance Overview

The Dow Jones Industrial Average (DJI) dipped slightly, losing less than a point to close at 43,729.34. This follows its largest post-election gain in 128 years from the previous day.

The S&P 500 rose 0.7%, gaining 44.06 points to finish at 5,973.10, reaching a new peak. Notably, sectors such as technology, real estate, communication services, and consumer discretionary saw significant gains.

The Real Estate Select Sector SPDR (XLRE) increased by 1.2%, while the Technology Select Sector SPDR (XLK) climbed 1.7%. Both the Consumer Discretionary Select Sector SPDR (XLY) and the Communication Services Select Sector SPDR (XLC) each rose by 1.3%. In total, eight of the eleven sectors in the benchmark index closed positively.

Following suit, the Nasdaq advanced 1.5%, up 285.99 points, and ended at a new high of 19,269.46.

The CBOE Volatility Index (VIX), often seen as the market’s fear gauge, fell by 6.58%, settling at 15.20. Advancers outpaced decliners on both the NYSE and Nasdaq, with 16.78 billion shares traded—well above the recent average of 12.46 billion.

Fed Rate Cut Sparks Stock Rally

At the conclusion of its two-day meeting, the Federal Reserve announced a 25-basis point cut in interest rates. This was in line with market expectations, which brought relief to investors.

Traders are keenly awaiting insights from Fed officials to better understand future monetary policies.

Fed Chairman Jerome Powell conveyed confidence in the economy, suggesting that smaller rate cuts may be preferred moving forward.

The announcement intensified positive investor sentiment, bolstering gains that were already initiated by Trump’s sweeping election victory. This day saw the Dow increase by more than 1,500 points and the S&P score its strongest post-election performance ever.

While optimism surrounds potential corporate tax cuts and deregulation under Trump’s administration, worries regarding inflation have begun to surface due to expected government deficits and higher tariffs.

Tech giants drove the rally on Thursday, with Apple Inc. (AAPL) shares up by 2.4%. Meta Platforms, Inc. (META) and Netflix, Inc. (NFLX) also saw strong performances, gaining 3.4% and 2.1%, respectively. Netflix holds a Zacks Rank #2 (Buy).

Latest Economic Indicators

Investors paid close attention to jobless claims data released by the Labor Department. Claims totaled 221,000 for the week ending November 2, up by 3,000 from the previous week’s adjusted figure of 218,000. The four-week moving average stood at 227,250, a decrease of 9,750 from the earlier week’s revised average.

Continuing claims rose to 1,892,000, a 39,000 increase from the previous week’s revised total of 1,853,000. The four-week moving average for continuing claims was 1,875,500, up by 8,500 from last week’s adjusted average.

Infrastructure Spending Spurs Opportunities

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Explore five surprising stocks that stand to gain immensely from this unprecedented spending wave.

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