Dow, S&P, Nasdaq hit record highs ahead of Fed decision; Lyft surges 28%, DJT gives up gains

US equity benchmarks rose slightly on Thursday ahead of the outcome of the US Federal Reserve’s policy meeting later in the day. 

Benchmark averages extended gains from Wednesday and hit new record highs after Donald Trump won the 2024 US presidential elections. 

At the time of writing, the S&P 500 index rose 0.5%, while the Nasdaq Composite advanced more than 1%.

The Dow Jones Industrial Average was largely steady from the previous close. Earlier in the session, the three benchmarks hit their respective record highs. 

Trump’s victory on Wednesday led the Dow Jones index to climb over 1,500 points. The S&P 500 rose 2.5% to clock its best post-election day in history, according to CNBC. 

“The results are in and the financial markets can breathe a little easier without concern over a prolonged election process,” Scott Helfstein, head of investment strategy at Global X ETFs, told CNBC. 

Investors should still be cautious about over- and underreaction to geopolitical news. These events can typically cause large swings in asset prices, but fundamentals will win out over time.

Meanwhile, gold prices recovered from Wednesday’s sharp declines, while oil prices fell more than 1% as investors assessed the fallout from the US elections. 

Financial stocks that surged on Wednesday fell slightly in today’s session. 

Shares of JPMorgan Chase fell 2%, while those of American Express dropped 1.7%, which weighed on the Dow Jones benchmark today. 

Tech stocks rise

Meanwhile, big tech stocks climbed as Apple and NVIDIA Corporation each gained more than 1%. 

Shares of Apple were up 1.3%, while chip giant NVIDIA climbed more than 2% at the time of writing. 

VanEck Semiconductor ETF (SMH) rose more than 2%, while Arm Holdings jumped over 6.5%. Shares of Intel were trading 3.4% higher during the session. 

Share of Arm Holdings gained after the company posted better-than-expected earnings results. 

Lyft shares rally

Shares of ride-hailing company, Lyft, jumped 28% on Thursday as the company posted positive earnings results for the third quarter.

The company’s revenue and forward guidance beat estimates of analysts. 

The ride-hailing company is now forecasting bookings of $4.28 billion to $4.35 billion in the fourth quarter, while FactSet consensus estimates called for $4.23 billion, according to CNBC. 

Additionally, Bank of America retained its buy rating on the stock, following its positive earnings, and also highlighted the company’s discounted valuation compared with Uber shares. 

Meanwhile, shares of Trump Media and Technology gave up gains from the election day on Thursday. 

President-elect Donald Trump’s company plunged by 16% to below $30 per share. The stock had surged over the last couple of sessions as Trump won the 2024 election. 

Fed meeting eyed

The focus now shifts to the meeting of the US Fed later in the day. The two-day meeting, which comes to its conclusion today, is likely to see the US central bank cutting interest rates. 

Traders have priced in a 98.7% probability of the Fed cutting rates by 25 basis points. 

This will follow the central bank’s massive cut of 50 bps in September. 

“It’s difficult to say whether this easing will continue in the coming months until the dust settles following the US election and the implications for inflation and currencies become clear,” Richard Flynn, Managing Director at Charles Schwab UK told CNBC. 

But in the short term, we expect that today’s announcement should provide investors with a snippet of clarity in the outlook after a fortnight chock-full of market moving events.

Meanwhile, people filing for unemployment benefits for the first time in the US last week came in line with expectations at 221,000. Analysts with Dow Jones had expected claims at 220,000 in the week ending November 2. 

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