New York, September 29, 2024 - Stocks in global financial markets have seen a remarkable rally following the recent drastic interest rate cut by the US Federal Reserve (Fed). This move, which surprised many analysts, has created an optimistic mood among investors and has driven major stock indices to new all-time highs.
The Federal Reserve decided to reduce interest rates by half a percentage point, a measure aimed at stimulating the economy in a context of global slowdown and trade tensions. This cut is one of the most significant in recent years and reflects the Fed's concern to maintain economic growth and control inflation.
Markets reacted positively to this news. The Dow Jones Industrial Average rose 1.3%, the S&P 500 gained 1.6%, and the Nasdaq soared 2.3%1. This rally is driven by the perception that lower borrowing costs will encourage spending and investment, which in turn will boost economic growth.
Several sectors have performed exceptionally well following the announcement. Shares of US banks saw a significant rise due to expectations of higher interest margins2. Similarly, US homebuilders also saw their shares rise as the rate cuts are expected to lower mortgage rates, boosting construction activity3.
Despite the current optimism, some analysts warn of potential long-term risks. Such an aggressive rate cut could lead to an overheating of the economy and increase inflation. However, the Fed has indicated that it is prepared to adjust its policy as needed to maintain economic stability.
The Federal Reserve's recent rate cut has had an immediate and positive impact on financial markets, driving stocks to new highs. Investors are watching closely for the Fed's next moves and how they will influence the global economy in the coming months.