Traders work on the floor of the New York Stock Exchange during morning trading on Sept. 17, 2025 in New York City.
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Stocks rose to record highs on Thursday as investors rotated back into technology stocks now that the Federal Reserve has lowered rates and signaled more cuts are on the way.
The S&P 500 climbed 0.6%, while the Nasdaq Composite popped 1.1%. The Dow Jones Industrial Average jumped 80 points, or 0.2%. Each of the major U.S. indexes notched a fresh all-time high early in the session.
The Russell 2000 small-cap index gained 1.6% and hit an intraday high during the session that topped its prior record closing high from Nov. 2021. Companies with smaller capitalizations tend to benefit from lower interest rates — which lead to lower borrowing costs — as they often rely more on external funding for their operations and growth compared to larger, cash-rich firms.
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Russell 2000 performance over the past five years.
Shares of several major tech companies, which also tend to outperform in lower rate environments, gained during Thursday trading. Intel shares rallied about 26% after Nvidia said it will invest $5 billion in the chipmaker to co-develop data center and PC products. Shares of Nvidia jumped more than 3%. Palantir and Micron notably rose more than 4%, and Google parent Alphabet and Tesla also edged higher.
The moves follow a volatile day of trading Wednesday after the Fed, as anticipated, slashed its benchmark rate by a quarter percentage point. The Dow Jones Industrial Average was the lone gainer, rising 260 points, or about 0.6%, while the S&P 500 and the Nasdaq Composite ended the session in the red.
During a news conference following the decision, Fed Chair Jerome Powell put a damper on investor hopes that the central bank would be on a lengthy rate-cutting path this year, as he called the latest cut “risk management.” In fact, policymakers are predicting two more reductions this year, but just one in 2026, while traders had priced in two to three more cuts next year.
“While we don’t expect the political pressure on Powell to subside now that he has cut interest rates, we do expect investors to re-focus on fundamentals going forward,” said Robert Schein, chief investment officer of Blanke Schein Wealth Management. “Market participants can now re-focus their attention on deregulation, earnings, the thawing of the IPO market and the remaining trade negotiations that are taking place.”
“Now that rates have been moving lower and the Federal Reserve is looking to cut rates a few more times, we are even more bullish on big tech and financials stocks,” Schein added.
Despite Wednesday’s losses, the S&P 500 and the Nasdaq are still headed for weekly gains, up 0.9% and 1.7% in the period, respectively. That puts the broad-market index on pace for its sixth positive week in seven and the tech-heavy Nasdaq on track for its third positive week in a row. The Dow is up 0.7% this week.