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as the market digested the fed's sharp interest rate cut, u.s. stocks soared. on september 19, local time, the dow jones industrial average rose by more than 500 points, and the s&p 500 closed above 5,700 points for the first time, both of which hit record highs. u.s. large technology stocks rose across the board.the nasdaq china golden dragon index rose more than 4%.

the fed cut interest rates for the first time in four years, and the market believes that this will help the us economy avoid recession, boosting market confidence. the latest us unemployment claims data fell to the lowest level since may, indicating that the labor market is still healthy. some market views believe that us stocks can continue to rise until the us election.

dow jones, s&p hit record highs

the china concept stock index rose 4%

on thursday local time, the three major u.s. stock indexes all closed higher. as of the close, the dow jones industrial average rose 1.26% to 42,025.19 points, the s&p 500 rose 1.7% to 5,713.64 points, and the nasdaq rose 2.51% to 18,013.98 points. among them, the dow jones industrial average and the s&p 500 index both hit record highs.

source: wind

large technology stocks generally rose, with tesla rising more than 7%, hitting a closing high since late july; nvidia, meta, and apple rose more than 3%, netflix rose more than 2%, intel, microsoft, google's parent company alphabet, and amazon rose more than 1%.

bank stocks generally rose. jpmorgan chase rose 1.49%, goldman sachs rose 4%, citigroup rose 5.24%, morgan stanley rose 1.46%, bank of america rose 3.21%, and wells fargo rose 2.84%.

chip stocks performed strongly, with amd up 5.7%, tsmc up 5.27%, asml up 5.12%, globalfoundries up 4.7%, nvidia up 3.97%, broadcom up 3.9%, qualcomm up 3.34% and intel up 1.78%.

popular chinese stocks generally rose.the nasdaq china golden dragon index rose by more than 4%.yiying securities rose more than 240%, futu holdings rose nearly 14%, gds rose more than 11%, miniso rose more than 10%, gaotu group and tiger securities rose more than 9%, xpeng motors, zeekr, tal education, and beike rose more than 8%, nio and boss direct rose more than 7%, jd.com, huya live, and bilibili rose more than 6%.

in terms of commodities, international gold and oil prices soared. spot gold rose nearly 1.1% the day after the fed cut interest rates, approaching its all-time high.

source: wind

in the foreign exchange market, driven by the fed's interest rate cut, asian currencies have seen strong gains, and the rmb exchange rate has rebounded. the onshore rmb closed at 7.0640 against the us dollar at 3:00 beijing time, up 140 points from the previous trading day's night session closing. as the interest rate gap converges, the rmb may start a sustained appreciation trend.

european stocks are rallying close to all-time highs. the stoxx europe 600 index closed up 1.4% at 521.67 points, just below the record high of 525.05 points reached in august. the ftse 100 index gave up some of its gains, still up about 0.9%, after the bank of england announced that it would keep interest rates unchanged and said it would not rush to cut interest rates.

data released by the u.s. department of labor on thursday (september 19) showed that the number of first-time applications for unemployment benefits in the week ending september 14 was 219,000, seasonally adjusted, down 12,000 from the adjusted 231,000 in the previous week, the lowest since may 25 this year, indicating that the labor market remains healthy despite the slowdown in hiring.

it is worth noting that ubs analysts pointed out in a report a few days ago that if the federal reserve takes aggressive interest rate cuts, it may push interest rates below expectations, which may trigger a stock market bubble.

the ubs team led by andrew garthwaite said that although the fed's 50 basis point policy easing cycle has been accompanied by an economic recession since 1981, this time ubs believes that this is an aggressive performance by the fed rather than a sign of an economic recession.

in addition, the current weak us economy is less sensitive to interest rate changes than before, which may push interest rates further lower and weaken the us dollar. ubs predicts that by the end of 2025, the euro will reach 1.15 against the us dollar and the yen will reach 130 against the us dollar.

markets are divided on the pace of the fed's subsequent rate cuts

just hours after the fed announced its rate cut, economists at goldman sachs group inc. revised their outlook to predict the fed will cut rates by 25 basis points at each meeting from november to next june. jpmorgan chase & co., which bet on the first cut, is sticking with its call for another 50 basis point cut in november, but the exact amount will depend on the state of the labor market.

economists and strategists at bank of america predict that the fed "will be pushed into deeper rate cuts," with another 75 basis points of cuts in the fourth quarter and 125 basis points next year.

citigroup maintained its forecast that the fed will cut interest rates by another 75 basis points this year (50 in november and 25 in december). the bank expects the fed to make multiple 25 basis point cuts in 2025, bringing the terminal interest rate target range to 3% to 3.25%.

morgan stanley believes policymakers may opt for a series of 25 basis point rate cuts by mid-2025, including two this year and four in the first half of next year.

wells fargo predicts that in the scenario of a hard landing, the fed may end up cutting interest rates by as much as 350 basis points in the first year of the easing cycle, and 150 basis points if it is a soft landing. in any case, the fed has a lot of room to ease.