Biggest Rate Cut Stock Winners: Apple, Nvidia Rally $250 Billion, Other Rate-Sensitive Names Rake It In

The Dow Jones Industrial Average and the S&P 500 shot to record levels Thursday, the day after the Federal Reserve opted for 0.5 percentage points of interest rate cuts, a move which typically helps stock prices as the debt financing most companies rely upon gets cheaper and investor money flows into equities as guarantees like short-term government bonds and money market funds offer less enticing returns.

Conventional wisdom favors growth-focused stocks when the Fed shifts to looser monetary policy, and Thursday was no exception, as the S&P’s information technology sector out shadowed its counterparts, gaining 3.1%, outpacing the index’s 1.8% bounce.

Apple and Nvidia added the most market value of any public U.S. firms Thursday, as Apple stock’s 3.7% gain tacked on $124 billion to the iPhone maker’s market capitalization and Nvidia stock’s 4% rally added $122 billion to the artificial intelligence semiconductor architect’s valuation.

Other big tech names like electric vehicle maker Tesla (shares up 7.4%), property rental company Airbnb (up 5.2%), software hawker Salesforce (up 5.4%) and chip makers Advanced Micro Devices (up 5.7%) and Broadcom (up 3.9%) surged as well.

The rally extended into non-tech stocks also benefiting from the shift away from a high-rate environment: Construction equipment manufacturer Caterpillar gained 5.2%, boosted by hopes for a jolt in construction projects, and several bank stocks soared, led by national players like Citigroup (up 5.3%) and Goldman Sachs (up 4%) as loan activity is expected to pick up.

All three of those stocks, like other dividend payers, also should benefit from lower rates as investors increasingly look for cash-yielding assets in a lower interest rate environment.