Stock market today: Dow, S&P 500, Nasdaq on pace for records after Fed signals more cuts, Nvidia bets on Intel

U.S. equities, including the Dow, S&P 500, Nasdaq, and Russell 2000, achieved new record highs on Thursday, fueled by the Federal Reserve's rate cut and forward guidance for further easing, alongside Nvidia's $5 billion investment in Intel, which propelled INTC shares up 23%. This broad market rally occurred despite Fed Chair Powell's cautionary remarks on inflation and labor market weakness, and against a backdrop of stalled hiring and upcoming geopolitical discussions between Trump and Xi Jinping concerning tariffs and trade.

Analysis

U.S. equity markets achieved new record closes across major indices, driven by a confluence of dovish monetary policy and a significant corporate catalyst. The Nasdaq Composite led with a 0.9% gain, followed by the S&P 500 at 0.5% and the Dow Jones Industrial Average at 0.3%. The rally's primary impetus was the Federal Reserve's quarter-point rate reduction and forward guidance signaling two additional cuts in 2025. This monetary easing was amplified by Nvidia's $5 billion investment in Intel, which caused Intel's shares to surge 23% and broadly lifted technology sector sentiment. Despite the market's bullishness, which also saw the Russell 2000 climb over 2% to a new high, underlying risks persist. Fed Chair Powell's cautionary remarks on inflation and a weakening labor market—where hiring has reportedly stalled despite a drop in weekly jobless claims—introduce a note of uncertainty. Furthermore, near-term event risk looms, with FedEx expected to report a profit decline due to tariff policy changes, and investors keenly focused on an upcoming call between Presidents Trump and Xi regarding broader trade issues.

Key Decisions for Investors

• Given that markets are at all-time highs fueled by Fed easing but face headwinds from weakening labor data and cautionary central bank commentary, investors should consider protecting gains with hedges or by trimming exposure in broad market indices.
• The 23% surge in Intel's stock following Nvidia's strategic investment warrants a re-evaluation of the semiconductor sector, particularly to assess if a valuation floor is forming for legacy chipmakers.
• Monitor upcoming earnings from companies with direct exposure to US-China trade policy, such as FedEx, and remain cautious ahead of the Trump-Xi call, which presents a significant binary risk for market sentiment.