(New York) The New York Stock Exchange opened higher on Thursday, enthusiastic after digesting the radical and unexpected decision of the American Federal Reserve (Fed) on Wednesday, without worrying about the health of the economy.
As of 9:45 a.m. ET, the Dow Jones Industrial Average was up 1.06%, the NASDAQ Index was up 2.25% and the S&P 500 Index was up 1.41%.
On Wednesday, the New York stock market reacted negatively to the Fed’s communication, although it chose to lower its rate by half a percentage point while many were expecting only a quarter of a point.
Operators had retained the cautious tone of its president Jerome Powell regarding future meetings of the American central bank, the official not ruling out a pause or lesser rate reductions later.
But on Thursday, Wall Street saw the glass half full and moved forward again. The Dow Jones and the S&P 500 thus set new records in the first minutes of the session.
“The market reacted with a delay to the Fed’s sharp cut,” commented Peter Cardillo of Spartan Capital.
“Traders are reacting and investors are thinking,” said Steve Sosnick of Interactive Brokers, attributing Wednesday’s move to reflex and the next day’s to a more studied strategy.
“We don’t know what the market’s interpretation will be for a day or two,” the analyst said.
“The Fed declared victory on the inflation front but is concerned about the labor market, which justifies the offensive decision [d’une baisse des taux d’un demi-point, NDLR]and the market is reacting positively,” observed Peter Cardillo.
Risk appetite was back on Wall Street and investors were hunting for the most volatile stocks, whether Tesla (+3.81%), PayPal (+3.30%), Airbnb (+5.09%) or DoorDash (+3.48%).
Accustomed to being moved around more than once in recent months, the major players in semiconductors were also at the party, notably Nvidia (+4.04%), Broadcom (+3.41%), Qualcomm (+3.08%) and AMD (+3.72%).
Financial stocks benefited from the easing of financing conditions, such as Goldman Sachs (+2.09%) and American Express (+2.06%).
The cryptocurrency sector also stood out, with digital currency exchange Coinbase gaining 4.77%.
Traders were turning away from the bond market, more interested in other assets. The yield on 10-year US government bonds rose to 3.75%, compared with 3.70% the previous day at the close.
The VIX index, which measures investor anxiety, fell nearly 10%.
On the stock market, the share price of Donald Trump’s media group, Trump Media and Technology Group (TMTG), plummeted again (-3.57%), as the so-called “lock-up” period expires on Thursday, which until now prohibited investors who held shares before TMTG’s listing in March from selling their shares.
The former president, who controls about 57% of the capital, assured on Friday that he would not sell his stake because he did not “need this money.”
Private equity firm KKR rose (+1.62%) after announcing the takeover, jointly with Canadian pension fund CPP, of the classifieds sites of German group Axel Springer, valued at around $11 billion, according to the New York Times.
KKR and CPP were already major shareholders of Axel Springer, controlling just under half of the capital.
Shunned after the presentation of the new iPhone 16 ten days ago, Apple was once again favored by Wall Street (+2.81%).