PARIS (Reuters) – Wall Street opened sharply higher on Thursday after the Federal Reserve decided to lower its rates more than expected, with markets welcoming the institution’s choice to support the economy.

In early trading, the Dow Jones index gained 549.05 points, or 1.32%, to 42,052.15 points, and the broader Standard & Poor’s 500 rose 1.64% to 5,710.23 points. The Nasdaq Composite gained 2.30%, or 404.42 points, to 17,977.723.

The market is reading into the 50 basis point cut in the Fed’s key rates announced on Wednesday a desire to focus on supporting growth rather than focusing solely on combating inflation.

“The Federal Reserve has given the markets what they have been waiting for for days,” said Sebastiano Chiodino, head of LDI investments at Generali Asset Management.

“The Fed also sent a clear message that the central bank is committed to acting quickly to support the economy, so that it does not fall behind. It is now more confident that the deflationary trend is strong enough to allow for an easing of monetary restrictions, to the extent that the data show that they are necessary,” the economist adds.

Jerome Powell notably indicated that it was necessary to support the jobs market when it was strong, with unemployment claims having fallen in the United States during the week of September 14 according to figures published Thursday by the Labor Department.

Google climbed 2.1% after offering to sell its AdX advertising marketplace to end a European Union lawsuit, which said the proposal was insufficient, two people familiar with the matter said Wednesday.

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(Written by Bertrand de Meyer, edited by Sophie Louet)

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