Fed's Rate Cut Sparks Volatility: Markets Respond with Gains

U.S. stocks surged briefly on Wednesday following the Federal Reserve's decision to cut interest rates by 50 basis points, marking its first cut in over four years. The move aimed to steer inflation towards the 2% target and ensure a healthy labor market. The S&P 500, Dow Jones, and Nasdaq all saw gains.

U.S. stocks experienced a brief surge on Wednesday after the Federal Reserve cut interest rates by 50 basis points, a move that exceeded expectations and marked the first cut in more than four years.

Fed Chair Jerome Powell cited increased confidence in inflation nearing the central bank's 2% target as the basis for the decision. The rate cut aimed at maintaining a robust labor market also impacted market trading, causing fluctuations that eventually led to gains.

The Dow Jones rose by 103.40 points, the S&P 500 gained 22.31 points, and the Nasdaq Composite increased by 132.71 points. The decision had been anticipated with mixed expectations, with market participants now fully pricing in another cut at the Fed's meeting in November.

(With inputs from agencies.)