The U.S. stock market closed at record highs Thursday after the Federal Reserve's widely expected decision to lower interest rates and Fed Chair Jerome Powell's press conference where he reassured markets by dismissing concerns about his potential resignation or removal following the election of Donald Trump.
The S&P 500 — as tracked by SPDR S&P 500 ETF Trust (NYSE:SPY) — closed at 5,973 points, up 0.7% for the day.
Tech stocks outperformed the broader market, with the Nasdaq 100, tracked by the Invesco QQQ Trust (NASDAQ:QQQ), surging 1.5% higher to an all-time high of 21,100 points.
Notably, the combined market capitalization of the Magnificent Seven — Microsoft Corp. (NYSE:MSFT), Apple Inc. (NASDAQ:AAPL), NVIDIA Corp. (NASDAQ:NVDA), Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL), Amazon Inc. (NASDAQ:AMZN), Meta Platforms Inc. (NASDAQ:META) and Tesla, Inc. (NASDAQ:TSLA) — soared to over $17 trillion, setting a new peak.
The Dow Jones stalled after Wednesday's 3.6% rise, while small caps eased 0.4% following a 5.8% jump the previous day.
Top-performing sectors in the S&P 500 were technology, up 1.8%, followed by communications services and consumer discretionary, both up by 1.3%. Financials, which rallied the most Wednesday, lagged on Thursday, down 1.5%.
Fed Cuts Rates, Powell Dismisses Concerns Over His Future
The Federal Reserve cut interest rates by 0.25% to 4.5%-4.75% as expected, a reduction in the pace of easing after the larger 0.5% cut in September.
The Fed recognized robust economic momentum, with the GDP rising by 2.8% in the second quarter, and resilient consumer confidence.
Powell downplayed weak October employment data, noting that near-zero job growth was largely due to temporary factors like strikes and hurricanes rather than underlying economic weakness.
Powell described the rate cut as part of a "further recalibration" of monetary policy, which he emphasized remains "restrictive." He hinted at the possibility of more easing in the future but refrained from signaling a specific rate cut at the December meeting, stressing a data-dependent approach.
When asked if he would resign if requested by Trump, Powell responded firmly, "No," reiterating that the president does not have the legal authority to remove the Fed chair.
Following Powell's comments, market-implied expectations for a 25-basis-point rate cut in December surged to 75%, recovering from Wednesday's post-election dip.
Treasury yields pulled back sharply, with the 10-year yield dropping 10 basis points to 4.33%, almost erasing the spike from the previous day.
The U.S. dollar weakened 0.7%, while gold prices, as tracked by the SPDR Gold Trust (NYSE:GLD), rebounded 1.8% after Wednesday's 3% slump.
Bitcoin (CRYPTO: BTC) traded up by 1% at 4:30 p.m. in New York, hitting a record-high of $76,990 during the session.
S&P 500's Top 5 Gainers On Thursday
| Name | Last | Chg % |
| EPAM Systems, Inc. (NYSE:EPAM) | 233.00 | 14.95% |
| Viatris Inc. (NASDAQ:VTRS) | 13.20 | 13.69% |
| Super Micro Computer, Inc. (NASDAQ:SMCI) | 25.47 | 12.21% |
| Warner Bros. Discovery, Inc. (NASDAQ:WBD) | 9.38 | 11.91% |
| McKesson Corporation (NYSE:MCK) | 607.76 | 10.64% |
S&P 500's Top 5 Losers On Thursday
| Name | Last | Chg % |
|---|---|---|
| Match Group, Inc. (NASDAQ:MTCH) | 31.11 | -17.86% |
| APA Corporation (NASDAQ:APA) | 21.93 | -11.34% |
| CVS Health Corporation (NYSE:CVS) | 57.09 | -7.33% |
| Rockwell Automation, Inc. (NYSE:ROK) | 277.22 | -5.71% |
| Becton, Dickinson and Co. (NYSE:BDX) | 227.16 | -5.38% |
- Fed's Interest Rate Cut Pace Expected To Slow: Economists Weigh Trump's White House Return
Wall Street bull illustration created using artificial intelligence via MidJourney.
