Fed cuts interest rates by half point, signals two additional cuts this year

Interest rate cuts generally lead to a lower cost of borrowing, which could spur economic growth. Sectors benefiting from such cuts typically include utilities, real estate, and consumer discretionary stocks. Increased consumer spending and business investments are likely.

Financials, particularly banks, tend to perform poorly when interest rates are lowered, as it compresses their net interest margins. Investors might want to be cautious with bank stocks in the upcoming months.