World Shares Hit Record Highs as Dollar Gains on Fed Rate Cut
Global financial markets surged on Thursday following the U.S. Federal Reserve’s first rate cut of the year. The central bank reduced interest rates by 25 basis points, aiming to address signs of weakness in the labor market while maintaining cautious optimism about the U.S. economy.
Wall Street Soars
The announcement sparked a rally across Wall Street, pushing all three major indexes to new record highs:
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Dow Jones Industrial Average climbed 0.45% to 46,227.50
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S&P 500 rose 0.71% to 6,647.52
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Nasdaq Composite jumped 1.07% to 22,499.15
Tech stocks led the charge, with Intel posting a remarkable gain of over 25% after Nvidia revealed a $5 billion investment in the chipmaker—their best performance since 1987. Nvidia’s stock also rose 2.6%, further fueling the tech-led rally.
Global Markets Follow Suit
Investor optimism extended beyond the U.S., with Europe and global indices also advancing. The pan-European STOXX 600 climbed 0.81%, while MSCI’s global stock gauge rose 0.40%, surpassing the previous session’s record.
Dollar Strength and Commodity Movements
The U.S. dollar strengthened against major currencies in response to the Fed’s rate cut. Both the euro and British pound saw minor declines as investors recalibrated expectations for future monetary policy.
In commodity markets, gold eased slightly, dipping 0.1% to $3,655.10 an ounce after hitting an all-time high of $3,707.40 the previous day. Analysts noted that the firmer dollar following the Fed’s cautious stance on further rate cuts put pressure on gold prices.
Market Outlook
While Thursday’s rate cut injected optimism into the markets, the Fed signaled that future reductions will be assessed on a “meeting-by-meeting” basis. Investors are now closely monitoring economic indicators and Fed communications to gauge the pace of potential monetary easing in the months ahead.
As markets react to policy shifts and corporate developments, analysts expect volatility to continue, but sentiment remains buoyed by the central bank’s proactive move to support economic growth.
