S&P 500 hits all-time high on Wall Street investors soft-landing hopes

The S&P 500 topped 5,700 while the Dow Jones Industrial Average hovered near 42,000. Bloomberg

Wall Street traders betting the Federal Reserve will be able to engineer a soft landing spurred a rally in riskier corners of the market, with stocks hitting all-time highs.

Almost every major group in the S&P 500 gained, with the benchmark up 1.7% and poised for its 39th record in 2024. The gauge extended this year’s surge to about 20%. The Nasdaq 100 climbed 2.9% and the Russell 2000 of small caps rose for a seventh straight session. Bitcoin jumped 5.7%. Bonds and the dollar fell.

The Fed’s bold start to cutting interest rates and its determination not to fall behind the curve re-ignited hopes the central bank will be able to avoid a recession. Data Thursday showing a slide in jobless claims to the lowest since May signaled the labor market remains healthy despite a slowdown in hiring.

“Despite some volatility after the Fed’s rate cut, the S&P 500’s bullish trend remains intact,” said Fawad Razaqzada at City Index and Forex.com. “The Fed’s decision to deliver a 50-basis point rate cut was largely welcomed by investors. The move was seen as a bold but necessary step to ease economic concerns without sending panic signals reminiscent of the 2008 financial crisis.”

The S&P 500 topped 5,700. Wall Street’s favorite volatility gauge — the VIX — tumbled below 17. That’s ahead of a quarterly episode ominously known as “triple witching” in which derivatives contracts tied to stocks, index options and futures are scheduled to mature — potentially amplifying market moves. About $5.1 trillion are set to expire Friday, according to an estimate from Asym 500.

The yield on 10-year Treasuries advanced four basis points to 3.75%. The pound rose as the Bank of England held rates steady and said it won’t rush to ease policy. The yen fell ahead of the Bank of Japan policy decision.