Global stocks jump after Fed cuts rates, says economy on track

STORY: Global stocks got a lift Thursday, a day after the U.S. Federal Reserve cut rates by half a percentage point, and signalled there was more to come.

Japan’s Nikkei index jumped around 2.5% in morning trade, while Australian stocks hit record levels.

That followed all-time highs for the S&P 500 index in U.S. trade.

Investors were cheered by the outlook from Fed Chair Jerome Powell, who said the U.S. economy was on track:

“This decision reflects our growing confidence that, with an appropriate recalibration of our policy stance, strength in the labor market can be maintained in a context of moderate growth and inflation, moving sustainably down to 2%.”

The Fed’s move is expected to support spending and the U.S. economy in general, offering hope for Asian exporters.

Japan’s big names were also boosted by declines for the yen against the dollar following the rate cut.

Toyota and Hitachi were both up over 5% in morning trade.

With the Fed’s big call out of the way, Institute of Global Finance Director Fariborz Moshirian says investor focus now switches to the U.S. election:

“The next step will be whether which basically who will be the President if you like in 2025 onwards because their policies depending on who is going to be their President will directly influence the value of US dollars, inflation the US and hence interest rates. So that's a space that we really need to wait and see."

Not every sector joined the party on Thursday, however.

Asia’s big chipmakers tumbled after a downbeat outlook for the sector from Morgan Stanley.

In South Korea, SK Hynix tumbled around 8% and Samsung was down close to 3%.

That drove the country’s benchmark Kospi index lower in morning trade.