Federal Reserve (Fed)’s quarter-point rate cut sparked a sharp rally on Wall Street, as major U.S. stock indexes surged on renewed optimism about easing monetary policy.
- The Fed lowered its benchmark federal funds rate by 25 basis points to 3.50%–3.75%, marking its third cut of 2025.
- In response, the Dow Jones Industrial Average jumped over 1%, while the S&P 500 and Nasdaq Composite also posted solid gains.
- The cut helped ease borrowing costs and improve liquidity, boosting investor sentiment on hopes of smoother economic conditions.
Why investors cheered
The rate cut by the Fed reduces financing costs for companies and increases the appeal of equities over low-yielding fixed income. Additionally, the move revived hopes of more rate cuts in 2026 — adding to the bullish sentiment.
What it could mean globally (including for India)
Lower U.S. rates tend to encourage capital flow toward risk assets and may support markets worldwide. However, as some analysts note, the impact on markets like India could remain “muted,” given domestic factors such as foreign-institutional fund flows and local earnings matter more.
Leave A Comment