U.S. stock markets jumped to record highs on Thursday, as investors belatedly recognized that the Fed’s 50-basis point rate cut is not so bad after all. Legacy automakers and pure-play electric vehicle (EV) stocks traded on a mixed note,

We concluded that this was the right thing for the economy and the people we serve,” the Federal Reserve chair, Jerome Powell, said, referring to the central bank’s decision to cut interest rates by half a point.

The biggest gains, however, tend to come after the Fed begins cutting rates following a stock market panic. Following the first Fed rate cut in March 2020 due to the COVID pandemic, the S&P 500 was up over 27% in the next 12 months. Meanwhile, following the rate cut after the Sept. 11, 2001, market crash, the S&P was nearly 21% higher a year later.