Stocks on Wall Street soared Thursday a day after the Federal Reserve slashed its benchmark interest rate by 0.50 percentage points, with investors cheering the central bank’s move to head off a slowdown in U.S. economic growth.
The Dow Jones Industrial Averages jumped 479 points, or 1.1%, as of 10:02 a.m. Eastern time to 41,982. The S&P 500 climbed 87 points, or 1.6%, while the tech-heavy Nasdaq jumped 2.3%.
“Stocks are exploding higher as markets absorb the Fed’s outsized rate cut,” Adam Crisafulli of Vital Knowledge said in a note to investors.
Lower interest rates help financial markets in two big ways. They ease the brakes off the economy by making it cheaper for U.S. households and businesses to borrow money, which can accelerate spending and investment. They also boost prices for riskier assets such as equities, gold and cryptocurrencies.
The half-point move signals that the Fed is acting aggressively to keep the U.S. economy …