Dow, S&P 500, and Nasdaq Close at Fresh Highs Despite Fed Jitters
The Dow, S&P 500, and Nasdaq each ended higher, with technology driving the Nasdaq to the front, while the Dow and S&P notched more modest..
Quick overview
- U.S. equities closed higher, driven by technology and small-cap stocks, with the Nasdaq outperforming its peers.
- The Federal Reserve's rate cut initially caused a selloff in bonds, but equity markets remained resilient, reflecting strong investor appetite.
- The Russell 2000 index surged 2.5%, indicating renewed confidence in domestic growth and risk-sensitive investments.
- Overall market sentiment suggests a 'buy-the-dip' mentality, prioritizing equity growth potential despite rising yields.
Live NAS100 Chart
The Dow, S&P 500, and Nasdaq each ended higher, with technology driving the Nasdaq to the front, while the Dow and S&P notched more modest but record-setting closes.
Tech and Small-Caps Drive Gains as Investors Look Past Bond Selloff
U.S. equities closed higher on Wednesday as investors absorbed the Federal Reserve’s latest policy decision. While Powell’s framing of the move as a “risk management” cut rattled bonds and lifted the dollar, equity markets largely shrugged off the hawkish tilt, posting strong gains led by technology and small-cap stocks.
Fed Announcement Shifts Rates and Currency Markets
The Fed’s rate cut initially drove U.S. Treasury yields higher as bonds sold off, flattening the curve and dialing back dovish expectations. The shift also provided the U.S. dollar with firm support, reflecting the market’s reassessment of the rate trajectory.
Nasdaq Pushed Higher Despite Hawkish Undertone
Despite the Fed’s cautious tone, equities remained resilient. The NAS100 rose 1%, outperforming peers as investor appetite for technology stocks remained strong. The S&P 500 and Dow Jones both touched fresh highs during the session before easing slightly, still closing at record levels.
Closing Levels for Main US & Canadian Indices
Nasdaq Composite:
- Closed at 22,470.72, gaining +209.40 points (+1.0%).
- – Tech-heavy index outperformed broader markets, supported by strong demand in AI and semiconductor names.
S&P 500:
- Finished at 6,631.96, up +31.61 points (+0.5%).
- – Broad market strength continued, though gains were more modest compared to Nasdaq.
Dow Jones Industrial Average (DJIA):
- Ended at 46,142.42, advancing +124.10 points (+0.3%).
- – Blue-chip stocks lagged growth sectors but still contributed to the overall positive tone.
Russell 2000:
- Closed at 2,467.70, surging +60.35 points (+2.4%).
- – Small-cap index strongly outperformed, reflecting risk-on sentiment and renewed confidence in domestic growth.
Toronto TSX Composite:
- Settled at 29,453.53, climbing +131.87 points (+0.5%).
- – Canadian equities tracked U.S. momentum, with strength in financials and energy shares.
Small-Caps Shine as Risk Appetite Grows
The Russell 2000 was the standout performer, surging 2.5% and approaching its 2024 peak while closing in on its all-time 2021 high. This strength underscored renewed enthusiasm for rate-sensitive small-cap names, which often serve as a barometer for investor confidence in U.S. growth.
Broader Market Momentum
Toronto’s TSX Composite followed the positive U.S. lead, lifted by strength in financials and commodities. Across the board, sentiment pointed to a renewed “buy-the-dip” mentality that has taken hold since April, with investors prioritizing equity growth potential despite higher yields and a stronger dollar.
Conclusion: The day highlighted a divergence between bond and equity markets. While yields climbed and the dollar strengthened on Powell’s remarks, investors doubled down on risk assets, especially tech and small-caps. The rally suggests that confidence in U.S. economic resilience continues to outweigh concerns over policy tightening.
Dow Jones Live Chart
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