US stocks climb sharply on post-Fed cut cheer

U.S. stocks surged Thursday, led by tech, a day after the Federal Reserve starting its easing cycle with a substantial half percentage point reduction.

At 12:57 p.m. ET (1357 GMT), the Dow Jones Industrial Average rose 528 points, or 1.3%, the S&P 500 gained 1.8%, and the NASDAQ Composite climbed 2.8%. Tech jumps on post-Fed cut cheer

Big tech including Meta Platforms Inc (NASDAQ:META ), Apple Inc (NASDAQ:AAPL ), and Tesla Inc (NASDAQ:TSLA ) led the broader market higher following the Fed's decision Wednesday to cut its benchmark rate by 50 basis points to a range of 4.75% to 5%.

The reduction marks the beginning of an easing cycle that is likely to see rates fall further in the coming months. The Fed said a bulk of policymakers expect two more 25 bps cuts this year, but markets expect more.

Citi expects the Fed to cut rates by another 50 bps in its November meeting, but others, however, believe the Fed is more likely to deliver a 25 bps cut should incoming labor market continue to show a moderate pace of slowing.

"Assuming we do not see a material pick-up in claims filings in the coming weeks, the data is setting the Fed up for a 25 bp rate cut at the next meeting in early November," Jefferies said Thursday after pace of jobless claims fell to the lowest level since May 17.

The number of Americans filing for first-time unemployment benefits rose by less than anticipated last week, with initial jobless claims coming in at 219,000 in the week ended on Sept. 14, compared with an upwardly revised 231,000 in the prior week.

Economists had forecast a consensus figure of 230,000. Darden soars after Uber deal, 

There are more earnings to digest Thursday, including from shipping giant FedEx (NYSE:FDX ), and homebuilder Lennar Corporation (NYSE:LEN ).

Darden Restaurants (NYSE:DRI ) stock rose nearly 9% after the Olive Garden-owner said it has entered into a delivery deal with Uber Technologies (NYSE:UBER ).

Coursera Inc (NYSE:COUR ) jumped 8% after  Bank of America started coverage on the online education platform with a buy rating, citing growing revenue and margins. Crude rises after Fed cut

Crude prices rose after the large Fed interest rate cut raised hopes of increased economic activity in the world’s largest consumer, but concerns over global demand lingered and capped gains.

US government data released on Wednesday showed a bigger-than-expected, 1.63 million barrel draw in inventories .

While the draw was much bigger than expectations for a draw of 0.2 mb, it was also accompanied by builds in distillates and gasoline inventories.

(Peter Nurse, Ambar Warrick contributed to this article.)

Source: Investing.com