MARKET SNAPSHOT

U.S. stocks rallied as investors rethought Wednesday's Fed rate cut and piled back into technology and discretionary sectors. Two-, 10- and 30-year Treasury yields finished higher for a third straight session after fresh data indicated the U.S. economy was continuing to hold up. Oil futures gained ground alongside global equities and other assets perceived as risky. Gold prices rose as the dollar ticked lower.

MARKET WRAPS

EQUITIES

The Federal Reserve's big rate cut sparked a furious global rally in stocks as traders bid up technology shares and other risky assets in a bet that lower borrowing costs will help keep unemployment low without reigniting inflation.

The rally was a delayed yet emphatic response to the central bank's decision Wednesday to cut interest rates by a half percentage point that pushed the S&P 500 to its first record high since mid July and the Dow to close above 42,000 points for the first time.

The tech-dominated Nasdaq Composite led the way, climbing 2.5%. The S&P 500 added 1.7%, surpassing the broad index's previous peak. The Dow Jones Industrial Average gained 1.3%.

Ross Mayfield, investment strategist at Baird, said investors' initial enthusiasm for a rate cut that was larger than many analysts expected was tempered by what some perceived as a downbeat press conference given by Federal Reserve Chairman Jerome Powell on Wednesday afternoon.

"Today's reaction is the true reaction," Mayfield said. "It's clear the Fed will be cutting rates aggressively over the next year and that's what should matter to markets and risk assets."

Earlier Thursday, Chinese shares ended higher, reversing their morning losses. Most sectors ended in the green as investors awaited China's loan prime rate decision on Friday. Software and property stocks led the gains.

The benchmark Shanghai Composite Index climbed 0.7%, the Shenzhen Composite Index gained 1.6% and the ChiNext Price Index settled 0.9% higher. Hong Kong's Hang Seng Index advanced 2.0%.

Japan's Nikkei Stock Average rose 2.1%, boosted by the yen's weakness

Australia's S&P/ASX 200 closed 0.6% higher, finishing at a record for a fourth straight day, amid strength in commodity stocks.

New Zealand's NZX-50 added 0.6%, snapping a run of three straight declines, with most large-cap stocks finishing higher.

COMMODITIES

Oil futures ended higher, gaining ground alongside global equities and other assets perceived as risky, a day after the Fed delivered a large interest-rate cut and set the stage for further easing of monetary policy.

West Texas Intermediate crude for October delivery rose 1.5% to end at $71.95 a barrel on the New York Mercantile Exchange. November Brent crude gained 1.7% to settle at $74.88 a barrel on ICE Futures Europe.

The rate cut "could support economic activity and stimulate energy demand in the U.S., contributing to higher oil prices. However, the large move also sparked concerns about a potential economic slowdown, which could constrain further increases in oil prices," said Joseph Dahrieh, managing principal at Tickmill.

Front month Comex gold for September delivery gained 0.7% to settle at $2588.00 per troy ounce.

TODAY'S TOP HEADLINES

U.S. Home Sales Slipped in August Despite Falling Mortgage Rates

U.S. home sales fell in August as the recent decline in mortgage rates failed to offset home prices that remain near record highs.

Sales of previously owned homes in August fell 2.5% from the prior month to a seasonally adjusted annual rate of 3.86 million, the National Association of Realtors said Thursday, the fifth time sales have declined over the past six months.

The average rate for a 30-year fixed mortgage has slid steadily from the spring to 6.09% this week, the lowest level in more than a year, according to Freddie Mac. But with high housing prices and the inventory of homes for sale still lower than normal, many buyers are waiting for rates to fall further.

Nike CEO John Donahoe Stepping Down

Nike said John Donahoe would retire as chief executive and from the board on Oct. 13 after nearly five years at the helm.

The Beaverton, Ore., company on Thursday said Elliott Hill, who retired as the sneaker and apparel maker's President - Consumer and Marketplace in 2020, would succeed Donahoe.

Hill's appointment as both president and CEO will be effective Oct. 14.

FedEx Cuts Full-Year Outlook After Posting Lower Profit, Revenue

FedEx cut its outlook after posting lower profit and revenue in its fiscal first quarter, dragged down by a shift in the mix of it business that saw reduced demand for priority services, increased demand for deferred services and constrained yield growth.

The Memphis, Tenn., package-shipping company on Thursday posted a profit of $790 million, or $3.21 a share, for its three months ended Aug. 31, compared with $1.08 billion, or $4.23 a share, in last year's quarter.

Adjusted per-share earnings were $3.60, missing the $4.75 that analysts polled by FactSet forecast.

Mercedes-Benz Group Cuts Full-Year Outlook, Citing Macroeconomic Deterioration

Mercedes-Benz Group lowered its full-year outlook, a move it said was triggered by the further deterioration of the macroeconomic environment, specifically in China.

The German luxury car brand on Thursday said its cars unit is now expected to post an adjusted return on sales between 7.5% and 8.5%, down from a prior outlook between 10% and 11%, for the year. This outlook implies an expected adjusted return on sales of around 6% for the second half of the year, it said.

Last month, Mercedes-Benz posted a 13% drop in new-car registrations in the European Union.

Social-Media Firms Lack Adequate Privacy Controls, FTC Report Says

Companies such as Amazon, Meta and X Corp. employed vast consumer-surveillance strategies to monetize user data without providing adequate privacy controls, including for children, according to findings released Thursday by the Federal Trade Commission.

The agency-which in December 2020 issued orders to nine companies that own the world's biggest social-media and video-streaming platforms, including Facebook, Twitter, TikTok, Twitch, YouTube, Snap, Discord, WhatsApp and Reddit-found that many of the companies collected data indefinitely and wouldn't delete all user data upon request. Twitter is now known as X.

"The report lays out how social-media and video streaming companies harvest an enormous amount of Americans' personal data and monetize it to the tune of billions of dollars a year," said FTC Chair Lina Khan.