DR Barton, president of Woodshaw Financial Group, discusses on “Varney & Company” whether the Federal Reserve's interest rate cuts will halt the economic slowdown and lead to a market recovery.
This year has been one of the most memorable Septembers ever, with the Federal Reserve handing investors a massive interest rate cut on Wednesday.
The Dow Jones Industrial Average rose more than 500 points to close above 42,000 for the first time, just 45 days after its last 1,000-point milestone, according to data tracked by Dow Jones Market Data Group.
Dow Jones Industrial Average
Fed cuts rates for the first time since 2020: what you need to know
McDonald's gained the most points, up more than 208 points, with 3M coming in second, while struggling Boeing saw the biggest decline, dropping more than 193 points, followed by Honeywell International.
| Ticker | safety | last | change | change % |
|---|---|---|---|---|
| MCCD | McDonald's Co., Ltd. | 293.85 | +1.82 |
+0.62% |
| KO | Coca-Cola | 70.63 | -1.13 |
-1.57% |
| BA | Boeing | 154.64 | -0.53 |
-0.34% |
| Hon | Honeywell International Inc. | 203.70 | +2.06 |
+1.02% |
IBM, American Express and Home Depot also helped propel the Dow to new milestones.
Dow points highs and lows from 41,00 (Dow Jones Market Data Group)
The S&P 500 hit a new record, led by technology, consumer discretionary and industrial stocks.
| Ticker | safety | last | change | change % |
|---|---|---|---|---|
| SP500 | S&P 500 | 5713.64 | +95.38 |
+1.70% |
| XLK | Technology Select Sector SPDR ETF | 223.62 | +6.45 |
+2.97% |
| XLY | Consumer Discretionary Select Sector SPDR ETF | 197.14 | +4.39 |
+2.28% |
| Article 41 | Industrial Select Sector SPDR ETF | 134.11 | +2.27 |
+1.72% |
Apple, Salesforce.com and Meta helped lift the tech-heavy Nasdaq Composite Index.
| Ticker | safety | last | change | change % |
|---|---|---|---|---|
| AAPL | Apple Inc. | 228.87 | +8.18 |
+3.71% |
| Customer Relationship Management | Salesforce Japan | 266.04 | +13.62 |
+5.40% |
| Meta | Meta Platforms, Inc. | 559.10 | +21.15 |
+3.93% |
| I:Comp | Nasdaq Composite Index | 18013.981137 | +440.68 |
+2.51% |
The Federal Reserve announced its first interest rate cut since March 2020 on Wednesday, lowering its target rate range to 4.75% to 5%, with Chairman Jerome Powell signalling the significance of the new policy shift.
Federal Reserve Chairman Jerome Powell speaks to reporters at a press conference in Washington, DC, on July 31, 2024. (Al Drago/Bloomberg/via Getty Images)
“The reassessment of our policy stance will help maintain the strength of the economy and labor market and allow inflation to develop further. We have begun the process of moving to a more neutral stance, but we are not on a preset path and will continue to make decisions at each meeting,” he said.
In their forecast, policymakers outlined that interest rates could fall to 4.4% by the end of the year, 3.4% by 2025, and 2.9% by 2026. Still, a team at the Wells Fargo Investment Institute said the outlook may be too optimistic.
“While expecting two more rate cuts in 2024 is consistent with the Fed's current view, the FOMC is still pricing in a more optimistic outcome for future Fed rate cuts in 2025. As the economic recovery resumes in the second half of 2025, it will likely be difficult for inflation to decline further toward the Fed's 2.0% inflation target,” they wrote.
Mortgage rates fall after Fed cuts rates
New home construction is giving builders and real estate agents confidence. (Fox News)
Lower borrowing costs are beneficial for businesses and consumers seeking mortgages, personal loans, auto loans and other financing options.
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Rates on 30-year fixed mortgages fell to 6.09% on Thursday, down from an average of 7.19% a year ago.
