Stock Market Climbs, Tracking Weekly Increases; FedEx Soars on Earnings Report
In a significant move, the Federal Reserve announced its first interest rate cut of 2025, with new governor Stephen Miran leading the decision. This announcement, made on September 19, sent waves through Wall Street, causing initial wavering during the session but ultimately leading to gains.
By 2.27pm EDT, the Nasdaq Composite was up 0.41%, standing at 22,563.66. The S&P 500 followed suit, rising 0.28% to 6,650.62, and the Dow Jones Industrial Average was up 0.27%, reaching 46,268.31. The S&P 500 and Nasdaq were heading for a third straight week of gains, buoyed by the Federal Reserve's decision.
The technology sector, in particular, saw significant growth. Companies like Palantir Technologies and Oracle saw gains, boosting the S&P 500's technology sector. Apple added 3.1% after J.P. Morgan raised its price target.
Scott Ladner, chief investment officer at Horizon Investments, believes that small caps may benefit disproportionately from lower interest rates. This sentiment was reflected in the performance of the Russell 2000 small-cap index, which closed at a record high on Thursday, marking its first such high since November 2021. The index briefly touched an intraday record during the trading day. However, it's worth noting that by 2.27pm EDT, the Russell 2000 small-cap index was down 0.64%.
Not all sectors experienced growth, though. Energy stocks fell 1.37% during the day.
The gains were attributed to cost-cutting and strong domestic deliveries that offset weaker international volumes. Renewed optimism over artificial intelligence stocks also contributed to the overall positive sentiment.
FedEx gained 2.6% after reporting quarterly profit and revenue above estimates. The gains were seen as a positive sign for the broader market.
Scott Ladner also stated that a relaxed inflation target could be beneficial for stocks. This relaxation could potentially lead to further growth and stability in the market.
In summary, the Federal Reserve's interest rate cut on September 19, 2025, has provided a boost to the stock market, with the technology sector leading the way. The Russell 2000 small-cap index also saw significant gains, while energy stocks experienced a decline. The market remains optimistic, with potential benefits for small caps and continued growth in the technology sector.
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