Market Skyrockets as Trump Returns: Fed's Rate Cut Ignites Rally

U.S. stocks surged after the Fed cut interest rates by 25 basis points, following Donald Trump's return as president. Investors anticipate tax cuts and deregulation, driving major indexes to their biggest gains in two years. Market speculation on future rate cuts is tempered by a resilient economy and potential inflation.

U.S. stocks soared on Thursday, fueled by a 25-basis-point rate cut from the Federal Reserve, coinciding with Donald Trump's return to the presidency. The Fed's move aims to navigate a mildly subdued job market while steering inflation toward its 2% goal.

Market analysts had anticipated the rate reduction for the November assembly, with investors now keenly awaiting further insights from the Fed regarding upcoming monetary policy. Trump's anticipated tax cuts and easing of regulations have injected vigor into stock markets, catapulting the Dow Industrials and S&P 500 to record one-day gains.

Despite heightened expectations for ongoing interest rate cuts, officials have scaled back on the idea amid promising economic data and inflation threats due to potential tariffs and escalated government expenditure. Following the Fed's announcement, treasury yields cooled slightly from a recent surge, aligning with a minor uptick in weekly jobless claims.

(With inputs from agencies.)