Futures linked to the S&P 500 and Nasdaq soared to new record highs following the U.S. Federal Reserve’s long-awaited quarter-point rate cut, its first reduction this year. Fed Chair Jerome Powell made clear that signs of a softening labor market are driving policy decisions, and he hinted that additional rate cuts may be coming in October and December as economic concerns mount.
Even so, Powell urged caution—this step is being viewed more as a risk-management measure than the opening salvo in aggressive easing. On Wednesday, both the S&P 500 and Nasdaq slipped slightly, partly due to profit-taking and investor uncertainty. By Thursday premarket, Nvidia bounced back around 2–3%, despite worries that Chinese companies may curb purchases of its chips. Smaller companies fared well too: Russell 2000 futures gained about 1.5%, reflecting the favorable backdrop of lower borrowing costs.
Tensions around the Fed’s independence eased when a move to remove Governor Lisa Cook failed. Meanwhile, only one member of the Board dissented, pushing instead for a larger, 50 basis-point cut. The market rally gained strength, especially in sectors linked to artificial intelligence and growth-oriented tech. Standouts included CrowdStrike, Nike, among others, while some heavy industrial names like Nucor saw declines amid mixed earnings forecasts.
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