Wall Street Today: DJIA, S&P 500 and Nasdaq Composite All Rise on Fed Rate Cut
The S&P 500, Dow-30 and Nasdaq Composite all rose Wednesday after the Fed cut its benchmark rate for the third time since September, while the small-cap Russell 2000 closed at a new record high.
The $Dow Jones Industrial Average (.DJI.US)$ rose 497.46 points (1.1%) to 48,057.75, while the $S&P 500 Index (.SPX.US)$ gained 46.17 ticks (0.7%) to 6,886.68 – less than four points below its Oct. 28 best-ever finish.
Similarly, the $Nasdaq Composite Index (.IXIC.US)$ added 77.67 points (0.3%) to 23,654.16, while the $Russell 2000 Index (.RUT.US)$ added 33.36 points (1.3%) to 2,559.61 – its second record close in a row.
Macro
The indexes rallied after the Federal Reserve cut its Fed Funds rate by 25 points at the central bank's regularly scheduled policy meeting, taking the key rate down to a 3.5%-3.75% range.
That represented the third straight policy meeting where the Fed has eased the rate in a bid to boost the U.S. economy and improve the American job market.
Investors had widely expected the latest cut, and appeared mollified by economic projections that Fed members released with their decision that predicted the Fed Funds rate will drop even further to about 3.4% by Dec. 31, 2026.
That represents roughly one more 25-point cut in 2026 – less than the two that the CME FedWatch tool has been projecting, but apparently good enough for stocks to rise Wednesday.
Wall Street generally like Fed rate cuts because those historically lower bond and money-market yields, driving stock prices higher as investors put more into equities in search of better returns.
The small-cap Russell 2000 in particular gained ground because that index tracks the market's 2,000 smallest companies – firms that often require borrowing and benefit from lower rates.
Select Big Techs also rose, including $SanDisk (SNDK.US)$ (up 6.1%), $Micron Technology (MU.US)$ (4.5% better), $Marvell Technology (MRVL.US)$ (4% stronger), $Palantir (PLTR.US)$ (ahead 3.3%) and $Taiwan Semiconductor (TSM.US)$ (which rose 2.2%).
Conversely, cryptocurrencies mostly fell, giving back gains they saw Tuesday ahead of the Fed meeting.
$Bitcoin (BTC.CC)$ sank 0.7% to $92.493.23 on Wednesday as of shortly before 4:30 p.m. New York time, while $Solana (SOL.CC)$ gave back 2.4% to $137.98 and $Ripple (XRP.CC)$ shed 2.3% to $2.06.
The cryptos fell even though Fed cuts typically boost inflation risks and weaken the U.S. dollar – good news for non-dollar assets like crypto.
However, only $Ethereum (ETH.CC)$ bucked the trend among major cryptos, rising 1% to $3,363.18 as of that hour.
Moo-vers
The "Magnificent Seven" stocks ended mostly higher Wednesday following the Fed's move.
$Amazon (AMZN.US)$ led the way upward with a 1.7% increase, followed by $Tesla (TSLA.US)$ (up 1.4%), $Alphabet-A (GOOGL.US)$ (1% better) and $Apple (AAPL.US)$ (0.6% stronger).
Still, three Mag-7 names fell – $Microsoft (MSFT.US)$ (down 2.8%), $Meta Platforms (META.US)$ (1% lower) and $NVIDIA (NVDA.US)$ (off 0.6%).
Elsewhere in the market, Wednesday's other noteworthy percentage decliners included:
-- Certain crypto-related stocks, which fell on Bitcoin's decline. Losers included $IREN Ltd (IREN.US)$ (off 6.2%), $Strategy (MSTR.US)$ (2.3% lower) and $Coinbase (COIN.US)$ (which gave back 0.8%).
-- $Netflix (NFLX.US)$, down 4.1%. The streaming giant continued to ease amid its ongoing battle with $Paramount Skydance (PSKY.US)$ over who will win a bidding war to buy $Warner Bros Discovery (WBD.US)$ . WBD rose 4.5% Wednesday.
Meanwhile, Wednesday's significant percentage gainers included:
-- $iRobot (IRBT.US)$, up 48.4%. The struggling robotic-appliance maker continues to trade volatilely but generally higher following recent word that the White House plans to soon unveil a blueprint to boost the U.S. robotics industry. IRBT ended Wednesday at $5.24 – up 233.8% just days after hitting a $1.57 intraday low on Dec. 2.
-- $GE Vernova (GEV.US)$, 15.6% better. The power-generation-equipment firm soared after issuing a strong 2026 outlook, which prompted Oppenheimer to boost the stock's rating to "Outperform" and other analysts to raise their price targets.
Disclaimer: This presentation is for informational and educational use only and is not a recommendation or endorsement of any particular investment or investment strategy. Indexes are unmanaged and cannot be directly invested in. Past performance is no indication of future results. Investing involves risk and the potential to lose principal. Investment information provided in this content is general in nature, strictly for illustrative purposes, and may not be appropriate for all investors. It is provided without respect to individual investors' financial sophistication, financial situation, investment objectives, investing time horizon, or risk tolerance. You should consider the appropriateness of this information regarding your relevant personal circumstances before making any investment decisions. Past investment performance does not indicate or guarantee future success. Returns will vary, and all investments carry risks, including loss of principal.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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Jerry Kronenberg
Director of Financial Content
Former top editor at Seeking Alpha, Fidelity.com, TheStreet.com and UPI.
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