Wall Street Rallies Amid Federal Reserve's Rate Cuts

Wall Street indexes hit record highs following the Federal Reserve's interest rate cuts, sparking investor enthusiasm. Global markets also saw gains, and longer-term Treasury yields rose. Megacap tech stocks and smaller companies benefited, with the Nasdaq gaining 2.78%. Lower-than-expected jobless claims contributed to a selling spree in U.S. government debt.

Wall Street indexes surged to new record highs after gains in global markets and a rise in longer-term Treasury yields on Thursday. The boost came as the Federal Reserve initiated its first interest rate cutting cycle in more than four years, igniting investors' risk appetite.

On Wednesday, the U.S. central bank made a larger-than-usual move, reducing borrowing costs that had been maintained at high levels to control inflation. Chairman Jerome Powell indicated that the risk of an economic slowdown was minimal, and policymakers projected further rate cuts, reflected in the dot plot.

Megacap tech stocks like Microsoft and Apple rose on Wall Street, while smaller companies also benefited from the prospect of reduced operating costs. The Nasdaq Composite Index climbed 2.78%, and the Dow Jones Industrial average increased 1.38%. Gains extended beyond Wall Street, with MSCI's world stocks index rising 1.78%. U.S. jobless claims fell to a four-month low, further affecting government debt yields, while the dollar declined slightly in currency markets.

(With inputs from agencies.)