S&P 500 and Nasdaq 100: Tech Stocks Rally After Fed’s First Rate Cut in Four Years
Solar stocks were also higher on Thursday, with the Invesco Solar ETF (TAN) rising 2.6%. Array Technologies led the rally with a 7.5% gain, followed by SolarEdge Technologies, which increased by 5.6%. The solar sector is poised to benefit from cheaper financing, as many companies in this space rely on debt to fund growth and expansion.
Small-Cap Stocks to Benefit from Rate Cuts
Jeffrey Gundlach, CEO of DoubleLine Capital, noted that small-cap stocks could see a stronger upside from the Fed’s easing cycle. “Much of the Russell 2000 companies have floating-rate debt, which makes them more sensitive to interest rate changes,” he explained. Gundlach believes that while large-cap companies like those in the S&P 500 hold fixed-rate debt, small caps could receive a bigger boost from additional rate cuts, especially in sectors outside of financials.
Darden Restaurants Earnings Disappoint
Darden Restaurants reported weaker-than-expected quarterly earnings, with Olive Garden and its fine-dining brands struggling. For the quarter ending August 25, Darden posted earnings of $1.75 per share, missing analyst expectations of $1.83. Revenue also came in slightly below forecasts at $2.76 billion, compared to $2.8 billion expected.
Olive Garden, Darden’s flagship brand, saw a 2.9% decline in same-store sales, while its fine-dining segment, which includes Eddie V’s and The Capital Grille, reported a 6% drop. LongHorn Steakhouse was the lone bright spot, with same-store sales growing by 3.7%.