S&P 500 Rallies as Fed Hints at Rate Cut

Wall Street surged on Wednesday, propelled by the S&P 500’s largest single-day gain since February. The optimism was ignited by the Federal Reserve’s decision to hold interest rates steady while signaling a potential rate cut as soon as September.

Fed Chair Jerome Powell indicated that progress in taming inflation and a cooling labor market could pave the way for lower borrowing costs. This shift in tone fueled speculation among investors, with futures markets already pricing in a quarter-point rate reduction by the end of the year.

The tech sector was a standout performer, led by a surge in chip stocks. Advanced Micro Devices (AMD) soared after reporting strong quarterly results, while Nvidia and Qualcomm also posted substantial gains. However, Microsoft’s stock dipped slightly following a revenue miss in its cloud business.

While the overall market celebrated the Fed’s dovish stance, the earnings season continued to shape individual stock performances. Starbucks delivered on expectations, while T-Mobile raised its annual forecast. Conversely, Pinterest’s outlook disappointed investors, and Match Group’s stock skyrocketed on impressive results and cost-cutting measures.

The combination of the Fed’s rate cut hints and positive corporate earnings created a powerful catalyst for the stock market, with the technology sector emerging as a particular beneficiary.