S&P 500, small-cap Russell close at all-time highs a day after Fed rate cut

Stocks closed at record highs on Thursday, with smaller equities seeing the biggest boost, as the Federal Reserve signaled this week it was embarking on an easing rate path, reinvigorating investors and raising hopes for a ratcheting up of economic growth.

The S&P 500 closed up 0.48% at 6,631.96, while the Nasdaq Composite popped 0.94% to settle at 22,470.73. The Dow Jones Industrial Average added 124 points, or 0.27%, to close at 46,142.42.

Each of the major U.S. indexes notched a fresh all-time intraday high on Thursday, just a day after stocks had a volatile trading session Wednesday in the wake of the Fed’s rate cut.

The Russell 2000 small-cap index gained 2.4% and hit an intraday record. The benchmark last posted an all-time closing high in November 2021. Companies with smaller capitalizations tend to benefit from lower interest rates as they often rely more on external funding for their operations and growth compared to larger, cash-rich firms. Not to mention, they are more linked to the economic cycle than Big Tech stocks riding the AI trend.