Traders work on the floor of the New York Stock Exchange during morning trading on Sept. 17, 2025 in New York City.
Michael M. Santiago | Getty Images
Stocks rose to record highs on Thursday, with smaller equities seeing the biggest boost, as the Federal Reserve embarking on an easing path reinvigorated investors and raised hopes for a giving the economy a jolt.
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 intraday high after a tepid reaction in the wake of the Fed’s rate cut Wednesday afternoon. The S&P 500 finished the day lower.
The Russell 2000 small-cap index gained 1.6% and was on pace for a new record close, surpassing its last high close in 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. Not to mention, they are more linked to the economic cycle than Big Tech stocks riding the AI trend.
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Russell 2000 performance over the past five years.
However, shares of some major tech companies were part of Thursday’s rally as well. Intel shares rallied about 26% after Nvidia said it will invest $5 billion in the chipmaker to co-develop data center and PC chips. Shares of Nvidia jumped more than 3%.
The gains follow a volatile day of trading Wednesday after the Fed, as anticipated, slashed its benchmark rate by a quarter percentage point. The central bank forecast two more hikes this year, encouraging investors that the Fed would keep going on an easier interest-rate path, despite Chair Jerome Powell’s characterization that the cut was part of “risk management.”
“I don’t love the multiples, but how do I not own it?” said Appaloosa Management’s David Tepper to CNBC’s “Squawk Box” Thursday. “I’m not ever fighting this Fed especially when the markets tell me… one and three quarter more cuts before the end of the year, so that’s a tough thing not to own.”
Tepper did warn the Fed now risks overheating the markets and economy if it lowers rates too far next year.
Thursday’s gains put the major benchmarks on track for solid weekly gains. The S&P 500 is up 0.9% for the week, on pace for its sixth weekly gain in the last seven. The Russell 2000 is the biggest winner on a weekly basis as well, on track for a 2.5% gain.