The Fed is in charge of setting interest rates to influence both inflation and the job market, and it had been keeping rates on hold so far this year because it’s been worried about how much President Donald Trump’s tariffs will raise prices for all kinds of products. Inflation has so far refused to go back below the Fed’s 2 per cent target.
Stocks of companies that can get the biggest benefit from easier interest rates helped lead the way after the Fed released its projections. Small companies often need to borrow money to grow and compete with their bigger rivals, for example, and the smaller stocks in the Russell 2000 index rallied 1 per cent to lead the market.
Lyft drove 11.9 per cent higher after saying it will bring autonomous ride-hailing service to Nashville with Waymo.
Workday rose 6.9 per cent after Elliott Investment Management said it’s built a stake of more than $US2 billion ($3 billion) in it and supports its management. The company, which helps customers manage their finances and human resources, recently increased its program to send cash to investors through purchases of its stock by up to $US4 billion.
But drops for a handful of influential Big Tech stocks weighed on indexes. Nvidia fell 3.2 per cent, and Broadcom sank 4.7 per cent, for example. They earlier had been helping to carry Wall Street to records amid the frenzy about artificial-intelligence technology, almost regardless of what interest rates were doing.
RCI Hospitality Holdings dropped 8.7 per cent after New York’s attorney general accused executives of bribery and other crimes for trying to avoid paying millions of dollars in sales taxes. RCI owns strip clubs and sports bars across the country, including Rick’s Cabaret.
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Online ticket marketplace StubHub bounced between small gains and losses shortly after it started trading on the New York Stock Exchange for the first time. The stock is trading under the symbol “STUB” and priced its initial public offering at $US23.50 per share.
In stock markets abroad, indexes were mixed across Europe and Asia.
Japan’s Nikkei 225 slipped 0.2 per cent from its record after data showed Japan’s exports to the US dropped 13.8 per cent in August from a year earlier, as auto exports were hit by Trump’s tariffs.
