S&P 500 and Nasdaq 100: Tech stocks rise after Fed cuts interest rates for the first time in four years

Solar stocks also rose Thursday, with the Invesco Solar ETF (TAN) rising 2.6%. Array Technologies led the gains with a 7.5% gain, followed by SolarEdge Technologies, which rose 5.6%. The solar sector is poised to benefit from cheaper financing as many companies in the space rely on debt to fund growth and expansion.

Small-cap stocks to benefit from interest rate cuts

Jeffrey Gundlach, CEO of DoubleLine Capital, noted that small-cap stocks could benefit from a stronger rally from the Fed’s easing cycle. “Most Russell 2000 companies have floating-rate debt, which makes them more sensitive to interest rate changes,” he explained. Gundlach believes that while large-cap companies, such as those in the S&P 500, have fixed-rate debt, small-caps could get a bigger boost from additional rate cuts, especially in sectors outside of the financial sector.

Darden Restaurant Profits Disappoint

Darden Restaurants reported weaker-than-expected quarterly earnings, while Olive Garden and its restaurant brands struggled. Darden reported earnings of $1.75 per share in the quarter ended Aug. 25, missing analysts’ expectations of $1.83. Revenue also fell slightly short of forecasts at $2.76 billion, compared with an expected $2.8 billion.

Olive Garden, Darden’s flagship brand, saw same-store sales fall 2.9%, while its fine dining restaurant segment, which includes Eddie V’s and The Capital Grille, fell 6%. LongHorn Steakhouse was the only bright spot, with same-store sales up 3.7%.