S&P 500 and Nasdaq Forecast: Bullish Trends Pause After Record-Setting Rally
Record-Breaking Session on Thursday
The market experienced a significant rally on Thursday, with the S&P 500 rising 1.7%, closing above 5,700 for the first time. The Dow surged over 500 points to post its first-ever close above the 42,000 level, both achieving intraday all-time highs. Meanwhile, the Nasdaq Composite outperformed, advancing 2.5%. This bullish movement reflects traders’ positive reaction to the Fed’s decision to cut rates by 50 basis points, marking its first such move since 2020.
All three major indices are tracking for weekly gains. As of Thursday, the S&P 500 is up 1.6% on the week, with the Dow increasing by 1.5%, and the Nasdaq leading with a 1.9% weekly gain.
Russell 2000 on a Hot Streak
Small-cap stocks, represented by the Russell 2000, have also benefited from the Fed’s policy shift. The index gained 2.1% on Thursday, marking its seventh consecutive positive session and its first seven-day winning streak since March 2021. The Russell 2000 is on pace to close the week with a 3.2% gain, underscoring its sensitivity to interest rates. Lower rates tend to benefit smaller companies, which often rely on variable-rate debt, reducing their borrowing costs and boosting investor confidence.