Interest Rates Cut — Markets Rally
CBJ — A .50% interest rate cut in Canada and a cut by the Federal Reserve in the U.S. were more than enough stimuli to encourage investors to jump back into the stock markets in a big way on Wednesday.
The Bank of Canada’s rate now stands at 1.25%. The rate drop is the first since 2015.
For the Federal Reserve it was the first unscheduled, emergency rate cut since 2008, and it also marks the biggest one-time cut since then. The new benchmark interest rate is a range of between 1% and 1.25%.
In Toronto, the S&P/TSX composite index gained 356 points to close at 16,780. Meanwhile in New York the Dow Jones industrial average was up 1,173 points to 27,091, representing a 4.5% increase — the largest one-day gain in years. The S&P 500 index was up 127 points at 3,130.12, while the Nasdaq gained 334 points at 9,018.