Traders work on the floor at the New York Stock Exchange.
Stocks jumped Thursday, with the Dow Jones Industrial Average and S&P 500 rising to new all-time highs, as traders cheered the Federal Reserve's Wednesday decision to lower interest rates by a half percentage point.
The 30-stock index advanced 522.09 points, or 1.26%, ending at 42,025.19, marking its first close above the 42,000 threshold. The S&P 500 rose 1.7% to close at 5,713.64, topping 5,700 for the first time. The Nasdaq Composite surged 2.51% to end at 18,013.98.
Traders got some validation that the Fed was engineering a soft landing for the economy on Thursday as weekly jobless claims fell by 12,000 to 219,000, which was far below estimates.
Tech stocks rallied as the rate cut spurred investors to return to a risk-on mood. Nvidia and AMD shares popped about 4% and nearly 6%, respectively. Micron Technology added 2.2%. Other Big Tech stocks such as Meta Platforms and Alphabet advanced 3.9% and 1.5%, respectively.
Stocks leveraged to lower rates spurring the economy also jumped Thursday. Financial giant JPMorgan Chase rose 1.4%. Industrial stock Caterpillar and Home Depot gained 5.1% and 1.7%, respectively.
The Fed slashed its overnight lending rate to a range of 4.75% to 5.00% from 5.25% to 5.50% on Wednesday, which came as a surprise to some investors who criticized the size of this initial cut. This is the first rate reduction delivered by the Fed in four years.
"It's not surprising to see the markets bounce pretty nicely today. We were getting a little long in the tooth with some of the earnings growth estimates," said Timothy Chubb, chief investment officer at Girard Advisory Services.
Money Report
"They continued to move higher the last couple of weeks, but broadly speaking, there's certainly a lot of companies within the market that are really going to benefit from having looser monetary policy conditions; in particular, small caps," he added.
Stocks close higher Thursday
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U.S. stocks ended Thursday's trading session in the green.
The Dow Jones Industrial Average advanced 522.09 points, or 1.26%, to end at 42,025.19. The S&P 500 added 1.7% to close at 5,713.64.
The Nasdaq Composite gained 2.51% to finish at 18,013.98.
— Hakyung Kim
Skechers shares tumble on fears of China weakness
Skechers USA shares tumbled nearly 9% after the sneaker maker revealed that its China business was experiencing "pretty severe consumer discretionary pressures" that are "a bit worse" than the company anticipated. The comments from management were made during a presentation at the Wells Fargo Consumer Conference, and reported on StreetAccount.
The company declined to provide a specific forecast at this point.
Skechers shares are down about 1% year to date.
— Christina Cheddar Berk
All-time highs in September precede strong fourth quarter, history shows
Yes, September has historically been a bad month for stocks. But Septembers like this one usually happen before a strong fourth quarter.
Traders at Oppenheimer pointed out that since 1950, the S&P 500 has reached record levels this month on 22 occasions. In 20 of those instances, the S&P 500 has followed that with a strong fourth-quarter performance.
"The average return during this time period was +5% (including dividend). The only 2 negative returns were 2018 (rate hikes) and 1967," they said.
— Fred Imbert
Seasonality, election uncertainty could weigh on stocks in near term, BlackRock says
Stocks are trading near record highs after the Fed's rate cut, but that does not mean the coast is clear just yet, according to BlackRock.
The firm's recent model portfolio update dialed back its exposure to U.S. stocks and growth stocks, citing near-term uncertainty for the market.
"We think the market's digesting a lot. There's some seasonal volatility as well that is just incumbent at this time of the calendar. That's heightened in election years," Tushar Yadava, director and strategist for BlackRock's multi-asset strategies and solutions team, told CNBC on Thursday.
The target allocation for Yadava's team is still overweight equities overall.
The current pricing of the market also presents some downside risks, according to Kristy Akullian, head of iShares investment strategy, Americas.
"Equities clearly have a soft landing narrative at the heart of the price performance that we've seen recently. And there are probably some over-aggressive expectations of rate cuts to come," she said.
Akullian said stocks could find more momentum in November and December, when seasonal trends turn favorable and the election is in the rearview mirror.
— Jesse Pound
Advancers lead decliners 4-1 at New York Stock Exchange
More than four stocks rose at the New York Stock Exchange for every one decliner as the broader market rallied. Overall, about 2,200 NYSE-listed names were higher, while just 503 pulled back.
— Fred Imbert
Some stocks sit out of S&P 500 rally
The S&P 500 is up big on Thursday, but not every sector is participating.
The broad index climbed more than 1.5% in afternoon trading. But only eight of the 11 sectors comprising the S&P 500 were tracking for gains.
Utilities was the worst-performing sector with a slide of 0.9%. Real estate and consumer staples each slipped 0.5%.
On the other hand, some sectors saw big gains in the session. Notably, information technology jumped about 3.5%, followed by communication services with a 2.2% advance.
— Alex Harring
See the stocks making the biggest midday moves
There are some stocks making big moves in midday trading:
- Tech stocks — Key tech names rallied a day after the Federal Reserve's supersized rate cut decision. Tesla and Meta jumped around 7% and 4%, respectively, while chip darlings Nvidia and ASML each advanced more than 5%.
- Edgewise Therapeutics — Shares skyrocketed more than 54% after the biopharmaceutical company announced positive top-line trial data for a heart disease treatment. The data showed improved function in patients with hypertrophic cardiomyopathy.
- Mobileye Global — The stock surged more than 16%. On Thursday, Intel said it had no plans to divest its majority stake in Mobileye.
Read here for the full list.
— Sean Conlon
U.S. crude oil rallies, recovers losses for the year
U.S. crude oil is rallying, rising 2% to trade above $72 per barrel, clawing back its losses for the year.
Price are finding support after the Fed's big interest rate cut on Wednesday, and as escalating tensions between Israel and Hezbollah have renewed fears that the war could spread to Lebanon.
U.S. crude stockpiles also fell by 1.6 million barrels last week.
Phil Flynn, senior market analyst at the Price Futures Group, said the Fed cut appears to be "shaking out some hedge fund shorts from their bearish oil obsession."
— Spencer Kimball
Meta, Lennar, American Express among stocks reaching new 52-week highs
Several stocks in the S&P 500 — including major tech giants, homebuilders and financial names — reached fresh 52-week highs during Friday's trading session.
Lennar added 1.5% ahead of its third-quarter earnings expected after market close. Other homebuilders, namely D.R. Horton and PulteGroup, also rose during the day. Regional banks Fifth Third Bancorp, KeyCorp and M&T Bank also jumped, alongside financials American Express, BlackRock and PNC Financial Services.
Take a look at some of the names that reached new levels on Friday:
- Meta Platforms trading at all-time-high levels back to its initial public offering in May 2012
- Netflix trading at all-time-high levels back to its IPO in May 2002
- D.R. Horton trading at all-time-high levels back to its IPO in June 1992
- Hasbro trading at levels not seen since September 2023
- Lennar trading at all-time-high levels back to when it began trading in 1971
- Ameriprise Financial trading at all-time highs back to its IPO in October 2005
- American Express trading at all-time-high levels back to its IPO in May 1977
- Fiserv trading at all-time-high levels since its IPO in September 1986
- PNC Financial Services Group trading at levels not seen since April 2022
- PayPal trading at levels not seen since April 2023
- Boston Scientific trading at all-time-high levels back to its IPO in May 1992
- GE Aerospace trading at levels not seen since November 2007
— Pia Singh, Chris Hayes
Tech-Software ETF hits multiyear high
Shares of the iShares Expanded Tech-Software Sector ETF (IGV) rose more than 2% in morning trading, hitting a new 52-week high. This marks the first time the fund has traded above $89 since November 2021.
Shares have risen more than 9% this year and more than 1% week to date, which puts it on pace for its first positive week in three.
— Sean Conlon, Gina Francolla
Progyny shares sink after company loses big client
Shares of Progyny tumbled 30% on Thursday after the company said it is losing a "significant" client.
Progyny, which partners with employers to provide fertility benefits, did not reveal the name of the client in its filing, which came after the closing bell Wednesday.
"The Client, which represents approximately 670,000 members as of June 30, 2024, comprised 12% and 13% of the Company's revenue for the six-month period ending June 30, 2024, and the twelve-month period ending December 31, 2023, respectively," CEO Peter Anevski wrote in the filing.
The company would only say the client comprises a "smaller percentage" of Progyny's adjusted earnings before interest, taxes, depreciation and amortization. However, "no other existing client comprises more than a single digit percentage of revenue or Adjusted EBITDA," it said.
Truist believes that client is Amazon, analyst Jailendra Singh said in a note after the filing Wednesday. She maintained her buy rating on the stock, but lowered her price target to $26 from $36, which suggests 6% upside from Wednesday's close.
— Michelle Fox
Technology stocks pop, Nasdaq heads for best day since early August
The Nasdaq Composite rallied 2.8% and headed for its best day since early August as the Federal Reserve's rate-cutting campaign lifted hopes for an easier growth environment.
Airbnb was the best performer in the concentrated Nasdaq-100, surging more than 7%. Advanced Micro Devices, KLA Corporation and Tesla jumped near 6% each, while Nvidia, Applied Materials and CrowdStrike each added about 5%.
Other "Magnificent Seven" leaders also headed for a winning session, with Apple and Meta Platforms gaining more than 4% and 3%, respectively. Alphabet, Microsoft and Amazon were last up at least 2%.
— Samantha Subin
BMO raises year-end S&P 500 target to Street high
BMO hiked its year-end target for the S&P 500 to a Wall Street high.
Chief investment strategist Brian Belski lifted his year-end target for the broad index by 500 points to 6,100. That new forecast suggests the S&P 500 can climb 8.6% from Wednesday's close.
"Much like our last target increase in May, we continue to be surprised by the strength of market gains and decided yet again that something more than an incremental adjustment was warranted," Belski wrote to clients in a Thursday note.
CNBC Pro subscribers can click here for the full story.
— Alex Harring
GE Vernova is a top S&P 500 performer over past month
Gordon Haskett's Don Bilson put a spotlight on GE Vernova's recent strong performance. The former General Electric business has been the top performer in the S&P 500 over the past month as it is seen as a solution to artificial intelligence's need to power its models at data centers.
Bilson noted that the combined market cap of GE Vernova, GE HealthCare and GE Aerospace yields more than $300 billion in value for the former GE units — three times GE's market cap at the end of 2019.
"'Triples' aren't necessarily hard to find in the Industrials space since the late 2019," he wrote in a research note, citing Eaton, Parker-Hannifin and Trane as other examples. "Still. GE was almost considered to be toxic back then and by bouncing back so resoundingly, GE has established itself as one of the best, if not THE best, event-driven stories of this decade, which is almost halfway over."
— Christina Cheddar Berk
Wells Fargo downgrades utilities sector after big rally
The catch-up rally for utility stocks is about to run out of steam, according to Wells Fargo.
The firm downgraded the utilities sector to neutral from overweight. Strategist Christopher Harvey said in a note to clients that the narrative around the group has changed from late last year, when Wells Fargo upgraded the sector.
"The excessively negative sentiment and oversold technicals from late-2023 have eased. The group is a top performer YTD, indicating event-risk uncertainty is well reflected," the note said.
The utilities sector, as measured by the SPDR XLU ETF, is up about 24% year to date, which is better than the S&P 500 and the Nasdaq Composite.
— Jesse Pound
Stocks open higher Thursday
Stocks began Thursday's trading session in the green.
The Dow Jones Industrial Average jumped 552 points, or 1.3%. The S&P 500 added 1.6%, while the Nasdaq Composite advanced 1.6%.
— Hakyung Kim
Homebuilder stocks surge on hopes for lower mortgage rates
Homebuilder stocks were higher before the opening bell Thursday, after the Federal Reserve's oversized rate cut spurred hopes that mortgage rates could fall.
Shares of Lennar Corporation ticked up nearly 4%, while D.R. Horton climbed roughly 3%. The SPDR S&P Homebuilders ETF (XHB) advanced more than 3% before the opening bell.
— Brian Evans
Cyclical stocks climb in premarket trading
Stocks that are traditionally tied to economic growth were trending higher ahead of the opening bell Thursday.
Shares of Caterpillar rose more than 2%, while Target added about 1.5%. Bank stocks were also performing well, with JPMorgan gaining 1.2% and KeyCorp climbing 2.5%.
The morning gains for these stocks could be a sign that traders are growing more confident about the economy after the Federal Reserve's rate cut on Wednesday.
— Jesse Pound
Technology stocks rally in premarket trading as risk-on sentiment returns
Investors snatched up technology names in premarket trading on the bet that a lower-rate environment would benefit growth stocks following Wednesday's aggressive rate cut from the Federal Reserve.
Chipmaking stocks and artificial intelligence names surged, with Nvidia, Advanced Micro Devices and Broadcom last up more than 3%. Marvell Technology and Super Micro Computer jumped about 4% each.
Other popular "Magnificent Seven" names beyond Nvidia also powered higher, with Apple, Amazon, Microsoft and Alphabet last up about 2% each. Meta Platforms rose 2.6%, while Tesla neared a 3% gain.
Nasdaq-100 futures popped more than 2%.
— Samantha Subin
Jobless claims slide to lowest level since May
Initial filings for unemployment insurance slumped last week, indicating a benign pace of layoffs, the Labor Department reported Thursday.
Weekly jobless claims totaled 219,000 for the week ending Sept. 14, the lowest since May 18 and below the Dow Jones estimate for 229,000. The total was 12,000 below the previous week's upwardly revised level.
Continuing claims, which run a week behind, edged lower to 1.829 million.
— Jeff Cox
Ray Dalio calls Fed's move a difficult 'balancing act'
Ray Dalio, founder of Bridgewater Associates, said the Federal Reserve is navigating a difficult "balancing act" as the central bank started its easing cycle with a big rate cut.
"The challenge of the Federal Reserve is to keep interest rates high enough that they're good for the creditor, while keeping them not so high that they're problematic for the debtor," Dalio told CNBC's "Squawk Box Asia" on Thursday.
The notable investor once again expressed concerns about "the enormous amount of debt" that is being created by governments and monetized by central banks.
"Those magnitudes have never existed in my lifetime," he said. "I see a big depreciation in the value of that debt through a combination of artificial low real rates, so you won't be compensated."
— Yun Li
Darden, DoorDash, Nvidia among stocks making biggest premarket moves
Check out the companies making headlines before the bell:
- Darden Restaurants — Shares advanced nearly 11% after the restaurant operator announced a multiyear partnership with Uber for on-demand delivery later this year. The company reported weaker-than-expected quarterly earnings and revenue, however, as its sales weakened at Olive Garden and its fine dining restaurants.
- DoorDash — The food delivery stock rose more than 3% after an upgrade to buy from neutral at BTIG. The investment firm said growth still looks strong in the third quarter despite concerns about a weakening consumer.
- NextEra Energy Partners — Shares gained 2.6% after Jefferies initiated coverage of NextEra Energy with a buy rating, saying concerns around $3.75 billion in buyouts that the energy company has to handle are already priced into the stock.
For the full list, read here.
— Pia Singh
SLB stock rises after announcing collaboration with Nvidia
SLB stock rose 2% in early trading after the oilfield services company announced a collaboration with Nvidia on artificial intelligence solutions for the energy sector.
SLB is working with Nvidia to accelerate generative AI models across its digital and data platforms, the companies announced Tuesday. The models will be used for subsurface exploration and production operations as well as data management.
Nvidia CEO Jensen Huang said the models will help industry scientists and engineers optimize energy supplies and innovate clean energy solutions.
"As we navigate the delicate balance between energy production and decarbonization, generative AI is emerging as a crucial catalyst for change," SLB CEO Olivier Le Peuch said.
SLB stock is down more than 7% over the past month and about 20% this year.
— Spencer Kimball
Bank of England holds rates steady
The Bank of England on Thursday announced it would hold interest rates steady. The decision comes a day after the U.S. Federal Reserve opted for an outsized cut of 50 basis points.
The English central bank lowered rates at its August meeting for the first time in more than four years.
Following the announcement, the British pound strengthened 0.7% against the dollar at $1.3306.
— Hakyung Kim
Solar stocks rally as traders digest Fed rate cut
Solar stocks were higher Thursday as traders weighed the Fed's decision to cut interest rates by a half percentage point. The Invesco Solar ETF (TAN) rose 2.6% higher. Array Technologies and SolarEdge Technologies led the gains, rising 7.5% and 5.6%, respectively.
— Fred Imbert
European markets open higher ahead of Bank of England decision
European markets opened higher Thursday as investors digested the U.S. Federal Reserve's first interest rate cut in four years and looked ahead to the Bank of England's rate decision later in the session.
The pan-European Stoxx 600 index was up 1% in opening trade, with all major bourses and virtually all sectors in the green. Mining stocks added 2.02%, while telecoms were the sole outlier, down 0.29%.
— Karen Gilchrist
DoubleLine’s Gundlach says he expects more weak data, rate cuts to benefit small caps
DoubleLine Capital CEO Jeffrey Gundlach, who correctly called Wednesday's supersized rate cut, said he believes the incoming economic data will show more signs of weakness in the U.S.
"I expect to see weaker economic data in coming reports. I still think there's a good shot that the history books will say September 2024 was the start of a recession," Gundlach said on CNBC's "Closing Bell."
As for the market impact from rate cuts, Gundlach believes the easing cycle could provide a bigger boost to small-cap stocks than their large-cap counterparts. That is because much of the S&P 500 companies have fixed-rate debt, while Gundlach estimated that 45% of the Russell 2000 companies, excluding financials, have floating-rate debt.
"I'm pretty sure that this fed cycle will create a much bigger tailwind for the Russell 2000 than the S&P 500," he said.
— Yun Li
Steelcase stock dips 10% on missed revenue expectations
Shares of Steelcase were last trading 10% lower Wednesday night after the furniture manufacturer missed analysts' second-quarter revenue expectations.
Steelcase reported revenue of $855.8 million in its latest quarter while Wall Street analysts had anticipated sales of $864.2 million, FactSet showed. The company also forecast third-quarter revenue in the range of $785 million and $810 million. Analysts had previously expected $812.1 million.
However, Steelcase's second-quarter adjusted earnings of 39 cents per share beat consensus estimates of 37 cents per share.
— Lisa Kailai Han
Stock futures open higher
Stock futures traded higher Wednesday night.
Dow futures rose 85 points, or 0.2%, shortly after 6 p.m. ET. S&P 500 and Nasdaq 100 futures added 0.2% and 0.3%, respectively.
— Lisa Kailai Han
