Stocks Rally a Day After Fed’s Big Interest Rate Cut

Published On Sep 19, 2024, 12:28 PM

The S&P 500 index is rallying due to the Federal Reserve's recent decision to cut interest rates by half a percentage point, which is seen as supportive for stock prices and corporate profits. The market initially reacted with some volatility post-announcement but gained confidence, leading to a rise of about 1.7% by midday on September 19, 2024. Smaller companies, as represented by the Russell 2000 index, also saw gains. While lower borrowing costs are anticipated to boost the economy, analysts caution that the aggressive cut may signal worries about economic conditions. Factors such as geopolitical tensions, the U.S. presidential election, and a soft job market could pose risks to this market rally.