Wall Street reached new heights on Thursday, with the Dow Jones and S&P 500 posting record highs as traders bet the Federal Reserve can achieve a "soft-landing".
S&P 500 closed above 5,700 for the first time after jumping 1.7 per cent on the day to 5,713.14. The Dow Jones Industrial Average crossed 42,000 for the first time after rising 525.18 points, or 1.27 per cent, to close at 42,028.28. The Nasdaq Composite soared 2.51 per cent.
Tech stocks also rallied, with Nvidia jumping 3.97 per cent. Meta and Apple were up 3.93 and 3.71 per cent, respectively.
Wall Street's rally followed optimism across Europe and Asia after the Fed delivered its first interest rate cut in four years on Wednesday.
The Fed's aggressive 50-basis point cut, which lowered its benchmark rate to 4.75 per cent to 5.00 per cent, marked a significant turning point for the central bank after holding rates steady for more than a year.
While major US indexes ended Wednesday relatively unchanged after the announcement, Art Hogan, chief market strategist at B Riley Wealth, said Thursday's movement was a better reflection of market reaction.
“Today, you have much better chance of capturing the entire day and that seems to be what markets are doing here,” Mr Hogan said.
New economic data added further optimism towards soft-landing hopes, where inflation and interest rates come down without a sharp increase in unemployment.
Before Thursday's opening bell, a Commerce Department report showed jobless claims last week at 219,000, lower than the 230,000 estimate, supporting the idea that the US economy is not headed towards a recession.
Entering this week's two-day meeting, Fed officials were thought to be considering a more traditional 25-basis-point cut or the more aggressive 50 bps cut.
Fed chairman Jerome Powell framed the larger cut in a more optimistic perspective, saying acting now showed the Fed was committed to not falling behind the curve on cutting rates.
“We made a good, strong start to this, and that's really, frankly, a sign of our confidence – confidence in inflation is coming down towards 2 per cent on a sustainable basis,” Mr Powell said, referring to the Fed's long-term target.
He also indicated that with inflation now easing, Fed officials can turn to protecting the US labour market and economic growth.
That turn was a long time coming for markets who had priced in a two-thirds probability that the Fed would begin with the aggressive 50 bps cut.
"We expected this at the beginning of this year, but the inflation indicators hadn’t come down as much as the Fed would have liked,” Cetin Duransoy, chief executive of online banking marketplace Raisin, told The National.
Mr Powell cautioned markets that the initial rate cut should not be seen as the new normal, saying the move allows the Fed to “recalibrate” interest rates towards a more neutral level.
“I do not think that anyone should look at this and say, 'Oh, this is the new pace',” he said.
Markets are pricing in more cuts totalling 75 bps for the rest of the year, according to the CME FedWatch tool. Projections released by the Fed on Thursday showed the median forecast was it will cut rates by an additional 50 bps this year, followed by a full percentage point in 2025.
The Fed holds two more meetings this year, in November and December.
MATCH INFO
Everton 2 (Tosun 9', Doucoure 93')
Rotherham United 1 (Olosunde 56')
Man of the Match Olosunde (Rotherham)
New schools in Dubai
ASHES FIXTURES
1st Test: Brisbane, Nov 23-27
2nd Test: Adelaide, Dec 2-6
3rd Test: Perth, Dec 14-18
4th Test: Melbourne, Dec 26-30
5th Test: Sydney, Jan 4-8
Elvis
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ABU%20DHABI%20CARD
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TO A LAND UNKNOWN
Director: Mahdi Fleifel
Starring: Mahmoud Bakri, Aram Sabbah, Mohammad Alsurafa
Rating: 4.5/5
FROM%20THE%20ASHES
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F1 The Movie
Starring: Brad Pitt, Damson Idris, Kerry Condon, Javier Bardem
Director: Joseph Kosinski
Rating: 4/5
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Email sent to Uber team from chief executive Dara Khosrowshahi
From: Dara
To: Team@
Date: March 25, 2019 at 11:45pm PT
Subj: Accelerating in the Middle East
Five years ago, Uber launched in the Middle East. It was the start of an incredible journey, with millions of riders and drivers finding new ways to move and work in a dynamic region that’s become so important to Uber. Now Pakistan is one of our fastest-growing markets in the world, women are driving with Uber across Saudi Arabia, and we chose Cairo to launch our first Uber Bus product late last year.
Today we are taking the next step in this journey—well, it’s more like a leap, and a big one: in a few minutes, we’ll announce that we’ve agreed to acquire Careem. Importantly, we intend to operate Careem independently, under the leadership of co-founder and current CEO Mudassir Sheikha. I’ve gotten to know both co-founders, Mudassir and Magnus Olsson, and what they have built is truly extraordinary. They are first-class entrepreneurs who share our platform vision and, like us, have launched a wide range of products—from digital payments to food delivery—to serve consumers.
I expect many of you will ask how we arrived at this structure, meaning allowing Careem to maintain an independent brand and operate separately. After careful consideration, we decided that this framework has the advantage of letting us build new products and try new ideas across not one, but two, strong brands, with strong operators within each. Over time, by integrating parts of our networks, we can operate more efficiently, achieve even lower wait times, expand new products like high-capacity vehicles and payments, and quicken the already remarkable pace of innovation in the region.
This acquisition is subject to regulatory approval in various countries, which we don’t expect before Q1 2020. Until then, nothing changes. And since both companies will continue to largely operate separately after the acquisition, very little will change in either teams’ day-to-day operations post-close. Today’s news is a testament to the incredible business our team has worked so hard to build.
It’s a great day for the Middle East, for the region’s thriving tech sector, for Careem, and for Uber.
Uber on,
Dara
