Topline
Spearheading Thursday’s massive rally were the massive technology stocks which have become synonymous with the stock market boom in recent years, though several perhaps more surprising names were among the biggest gainers.
Tech giants Apple and Nvidia led Thursday’s record-setting rally.
Key Facts
The Dow Jones Industrial Average and the S&P 500 shot to record levels Thursday, the day after the Federal Reserve opted for 0.5 percentage points of interest rate cuts, a move which typically helps stock prices as the debt financing most companies rely upon gets cheaper and investor money flows into equities as guarantees like short-term government bonds and money market funds offer less enticing returns.
Conventional wisdom favors growth-focused stocks when the Fed shifts to looser monetary policy, and Thursday was no exception, as the S&P’s information technology sector out shadowed its counterparts, gaining 3.1%, outpacing the index’s 1.8% bounce.
Apple and Nvidia added the most market value of any public U.S. firms Thursday, as Apple stock’s 3.7% gain tacked on $124 billion to the iPhone maker’s market capitalization and Nvidia stock’s 4% rally added $122 billion to the artificial intelligence semiconductor architect’s valuation.
Other big tech names like electric vehicle maker Tesla (shares up 7.4%), property rental company Airbnb (up 5.2%), software hawker Salesforce (up 5.4%) and chip makers Advanced Micro Devices (up 5.7%) and Broadcom (up 3.9%) surged as well.
The rally extended into non-tech stocks also benefiting from the shift away from a high-rate environment: Construction equipment manufacturer Caterpillar gained 5.2%, boosted by hopes for a jolt in construction projects, and several bank stocks soared, led by national players like Citigroup (up 5.3%) and Goldman Sachs (up 4%) as loan activity is expected to pick up.
All three of those stocks, like other dividend payers, also should benefit from lower rates as investors increasingly look for cash-yielding assets in a lower interest rate environment.
Surprising Fact
The top-performing stock on the S&P was not a big tech stock or a stock particularly highly correlated to the rate environment. Rather it was Darden Restaurants, the parent company of several restaurant chains including Olive Garden and LongHorn Steakhouse, as its shares spiked 8.3%. The gain was most likely not due to Wall Street’s hopes of rate cuts igniting a major appetite for breadsticks, but rather a reaction to Darden’s partnership with Uber Eats announced Thursday morning.
Tangent
Among the stocks hitting all-time highs during Thursday’s boom were streaming service Netflix, Facebook parent Meta and private equity giant Blackstone.
Big Number
$45 billion. That’s about how much the net worths of the world’s 15 richest people rose Thursday, according to Forbes’ real-time billionaires list. Tesla CEO Elon Musk and Meta CEO Mark Zuckerberg were the biggest individual winners, each getting more than $7 billion richer.