Wall Street started with a rise of more than 1% with the reaction to the cut in US interest rates and the fall in unemployment benefit claims (Image: Karolina Kaboompics/Pexels)
The next day of the 'Superquarta' began with the renewal of records in Wall Street.
The Dow Jones index, for example, started this Thursday (19) with a rise of 1.44%, at 42,105.01, in highest historical level.
At around 10:40 am (Brasília time), New York indexes are trading up more than 1%:
- S&P 500:+1.41%, at 5,697.74 points;
- Dow Jones: +1.02%, at 41,924.75 points;
- Nasdaq: +2.16%, at 17,952.47 points.
Yesterday (18), the Federal Reserve, the central bank of the United States, cut interest rates by 0.50 percentage points (pp), taking the rate to the range of 4.75% to 5.00% per year.
This was the first reduction since March 2020 and marks the beginning of the monetary easing cycle in the United States.
Along with the decision announcement, the US Federal Reserve released the dot plot (“dot plot“), updated quarterly. In it, nine directors see the interest rate at 4.40% by the end of 2024 – which opens a window for two cuts of 0.25 basis points at the next FOMC meetings.
In other words, the Fed should bring the interest rate (Fed Funds) to the range of 4.25% to 4.50% by the end of the year, more than they predicted in June, as inflation approaches the 2% target and unemployment rises.
Furthermore, the market reacts to new labor market data.
The number of Americans filing new claims for unemployment benefits unexpectedly fell last week, suggesting that job growth accelerated in September.
Initial claims for state unemployment benefits fell by 12,000 last week to a seasonally adjusted 219,000 in the week ended Sept. 14, the Labor Department said on Thursday (19). Economists polled by Reuters had forecast 230,000 claims for the latest week.
The data consolidates the perspective of a “soft landing” for the North American economy, that is, the adjustment of inflation to the target with the movement of interest rates without the economy entering a recession.
Technology stocks are also trading sharply higher, as interest rate cuts tend to encourage investors to return to risk. Nvidia, for example, started the session up more than 4%.