Following an up day in Europe and Asia that also lifted Frankfurt to a record, Wall Street stocks shrugged off Wednesday’s lacklustre trading and opened higher
Global stock markets rallied Thursday, with major US indices surging to all-time highs after the Fed delivered a big interest-rate cut and pledged further cuts.
Following an up day in Europe and Asia that also lifted Frankfurt to a record, Wall Street stocks shrugged off Wednesday’s lacklustre trading and opened higher.
US indices spent the entire day in positive territory, with the Dow closing above 42,000 for the first time and the S&P 500 climbing 1.7% to also close at a record.
The rate cut seen and heard around the world yesterday has fostered quite the response today – even though it was initially met with some stifled enthusiasm yesterday, according to Patrick O’Hare, market analyst at stock analysis firm Briefing.com.
The Fed on Wednesday cut its key lending rate by half a percentage point, opting for the larger reduction after also weighing a quarter-point move.
The aggressive cut split opinion among analysts, with some warning it could reignite inflation, while others said it showed the bank was keeping ahead of the curve in supporting the economy.
Among other markets, Frankfurt closed with a 1.6% gain and a record close of 19,002.38 points after setting a record session high of 19,044.96.
Paris ended up 2.3% after its strongest session since January.
London’s FTSE 100 index closed up 0.9%, paring back some gains after the BoE held its own rate steady at 5%.
The decision was expected, avoiding a second reduction in a row after the BoE delivered its first cut in August.
BoE governor Andrew Bailey said the central bank needed “to be careful not to cut too fast or by too much,” as UK inflation stays above its target.
The pound reached a more than two-year high against the dollar before dropping back.
Tokyo and Hong Kong closed nearly 2% higher.
