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Dow also posts record closing high

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BofA expects Fed to go for 75-bp cut in Q4

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US big banks rise after Fed's rate cut

(Updates to close)

By Noel Randewich and Purvi Agarwal

Sept 19 (Reuters) - The S&P 500 surged to a record high

close on Thursday, the day after the Federal Reserve cut

interest rates by 50 basis points and indicated more rate cuts

were on the horizon.

Heavyweight stocks that have enjoyed much of this year's

stock market rally made fresh gains, with Tesla, Apple ( AAPL )

and Meta Platforms ( META ) up sharply.

AI powerhouse Nvidia ( NVDA ) rallied, helping lift the PHLX

semiconductor index.

Better-than-expected jobless claims data further stoked

global risk appetite.

On Wednesday, the Federal Reserve announced a rate cut at

the high end of expectations, and said it had greater confidence

inflation was under control. Fed Chair Jerome Powell said the

U.S. economy remained strong and the central bank would decide

on the appropriate pace of future rate cuts.

"The Fed has sanctioned a pretty strong economic picture

here, and so we're just seeing the money flow back into some of

the sectors that have perhaps underperformed so far this

quarter," said James Ragan, Director of Wealth Management

Research at D.A. Davidson.

The small-cap Russell 2000 index rose as lower

interest rates boosted prospects of reduced operating costs and

greater profits.

According to preliminary data, the S&P 500

gained 94.95 points, or 1.69%, to end at 5,713.21 points,

while the Nasdaq Composite gained 440.68 points, or

2.49%, to 18,011.51. The Dow Jones Industrial Average

rose 526.98 points, or 1.27%, to 42,028.54.

BofA Global Research said it now expects a total of 75 basis

points in rate cuts by the end of this year, steeper than its

previous forecast of 50 bps.

Evercore ISI data going back to 1970 showed the S&P 500 has

posted an average 14% gain in the six months following the first

reduction of a rate-cutting cycle.

September has generally been a disappointing month for U.S.

equities with the S&P 500 notching an average loss of 1.2% since

1928.

The S&P 500 banks index rose, with gains in

Citigroup ( C/PN ) and Bank of America ( BAC ) after they lowered

their respective prime rates.

Fertility benefits management firm Progyny ( PGNY ) plunged

after a significant client notified the company it had elected

to exercise a 90-day option to terminate its services agreement.