On Thursday, the Nasdaq Composite and the S&P 500 continued their upward trend, reaching record closing highs following a reduction in interest rates by the Federal Reserve. The technology-focused Nasdaq surged by 1.5%, closing at 19,269.5, while the S&P 500 increased by 0.7% to 5,973.1. In contrast, the Dow Jones Industrial Average saw a slight drop, ending at 43,729.3 after achieving a record close in the previous trading session.
The boost in these three indexes came after Donald Trump's victory in the recent US presidential election. Among various sectors, communication services and technology emerged as the leaders in gains, while financial stocks experienced the largest declines. The Federal Open Market Committee of the central bank reduced its benchmark lending rate to a range between 4.5% and 4.75%, down from 4.75% to 5%, aligning with a consensus compiled by Bloomberg. Fed Chair Jerome Powell elaborated on the implications of this rate cut: "If the economy remains strong and inflation is not sustainably moving toward 2%, we can dial back policy restraint more slowly.
If the labor market were to weaken unexpectedly or inflation were to fall more quickly than anticipated, we can move more quickly." In bond markets, the yield on the US 10-year bond fell by 9.4 basis points to 4.33%, while the two-year yield slid by 6.9 basis points to 4.2%. In corporate news, Warner Bros.
Discovery reported the highest quarterly increase in subscribers for its Max streaming service during the September period. This came alongside unexpected net income, even though revenue declined compared to the previous year, affected by a lackluster box office. As a result, the media conglomerate's shares jumped 12%, ranking among the best performers on both the S&P 500 and the Nasdaq. Viatris shares rose by 14%, marking the second-largest gain on the S&P following the company’s third-quarter adjusted earnings and revenue, which exceeded analyst forecasts. Conversely, MercadoLibre experienced a 16% drop, the steepest decline on the Nasdaq, due to third-quarter earnings falling short of Wall Street estimates.
Match Group shares plummeted 18%, the largest decline on the S&P, after the company provided a pessimistic revenue outlook for the fourth quarter following a disappointing third quarter. In commodities, West Texas Intermediate crude increased by 0.4% to $72 per barrel. Economically, the US saw an uptick in weekly applications for unemployment insurance for the first time in four weeks, with continuing claims reaching levels not seen since November 2021 based on government reports. Despite rising mortgage rates, which are anticipated to surge even higher in the near future, pending home sales in the US remained stable ahead of Tuesday's presidential election, according to Redfin. Gold prices rose by 1.3% to $2,712.40 per troy ounce, and silver climbed by 2.4% to $32.08 per ounce..