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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 jumbo rate cut

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Weekly jobless claims stand at 219,000

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Futures up: Dow 1.13%, S&P 500 1.58%, Nasdaq 2.14%

(Updated at 8:36 a.m. ET/1236 GMT)

By Johann M Cherian and Purvi Agarwal

Sept 19 (Reuters) - Wall Street was set to rally on

Thursday, with the benchmark S&P 500 poised to notch a record

high after the Federal Reserve kicked off its easing cycle with

half-a-percentage point reduction and forecast more cuts were on

the horizon.

Rate-sensitive growth stocks that have led much of this

year's rally such as Microsoft ( MSFT ) added 1.6%, while Meta

and Alphabet advanced 2.4% each in premarket

trading.

Semiconductor stocks also climbed. Nvidia ( NVDA ) rose

3.3%, while Advanced Micro Devices ( AMD ) gained 3.6% and

Broadcom ( AVGO ) added 3.8% with the broader market.

Futures tracking the domestically focused Russell 2000 index

shot up 2.7% to touch levels last seen on July 31.

A lower interest environment could mean prospects of lower

operating costs and greater profits for credit-dependent

companies.

At 08:36 a.m. ET, Dow E-minis were up 470

points, or 1.13%, S&P 500 E-minis were up 89.75 points,

or 1.58% and Nasdaq 100 E-minis were up 418.75 points,

or 2.14%.

After delivering its super-sized verdict on Thursday, the

Fed forecast rates to fall by another 50 bps by year-end. The

central bank also unveiled macroeconomic projections that

analysts say reflect a goldilocks scenario, where growth is

steady and inflation and unemployment stay low.

On the data front, jobless claims for the week ended

Sept. 14 stood at 219,000, lower than economists' estimates of

230,000.

"There's a delayed reaction to the Fed's rate cut ...

the claims came in low, so it's only going to help fuel the idea

that a soft landing is in play," said Ross Mayfield, investment

strategist at Baird.

"The guidance for plenty more cuts by the end of 2025

should open up (rate sensitive) sectors to reengage and expand."

Traders now see a 66.4% chance that the central bank will

lower interest rates by 25 basis points at its November meeting,

as per the CME Group's FedWatch tool.

BofA Global Research now anticipates a total of 75 bps rate

cuts by the end of this year, compared with 50 bps forecast

earlier. Citigroup ( C/PN ) revised its rate-cut expectations for

December to a smaller 25 bps, from a forecast of a bigger move.

Goldman Sachs now expects consecutive 25 bps cuts from

November 2024 through June 2025.

Market reaction in the aftermath of the decision was muted,

with all the three indexes closing slightly lower in the

previous session.

However, data going back to 1970 from Evercore ISI 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 benchmark index has logged losses so far

this month.

JPMorgan Chase & Co ( JPM ) added 1.3%, Bank of America ( BAC )

climbed 1.5% and Wells Fargo ( WFC ) advanced 1.8% after

the big banks lowered their respective prime rates. Citigroup ( C/PN )

also rose 1.9% after cutting its base lending rate.

Progyny ( PGNY ) was among a few stocks that traded

lower. The fertility benefits management firm plunged 24% after

a significant client notified the company it had elected to

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