Stock markets close at record highs following Federal Reserve cuts

American stock markets on Thursday closed at record highs after the Federal Reserve cut interest rates by half a point on Wednesday, marking the first cut since the beginning of the COVID-19 pandemic.

Investors initially believed the Federal Reserve would cut interest rates by a quarter point, but the greater reduction is expected to improve the economy by relieving some pressure from everyday Americans and companies, according to CNN.

The Dow Jones Industrial Average closed 1.3% higher on Thursday, which is a new record, and the S&P 500 also set a record by rising 1.7% to over 5,700 points. The Nasdaq Composite added 2.5%.

The stock market increase also saw technology stocks rise, with Tesla shares climbing by 7.4%, Meta Platforms shares rising 3.9% and Apple shares increasing by 3.7%.

Federal Reserve Chairman Jerome Powell on Wednesday said the larger cut was made because both the job market and economy are on solid footing, but warned rate cuts will not always be so dramatic.

“We’ve waited. And I think that patience has really paid dividends in the form of our confidence that inflation is moving sustainably under 2%, so I think that is what enables us to take this strong move today,” Powell said, per CNBC. “The U.S. economy is in good shape. It is growing at a solid pace. Inflation is coming down."

Misty Severi is an evening news reporter for Just the News. You can follow her on X for more coverage.