Financial teacher Lim Kim Cheng: The Fed's rate cut has pushed US stocks to new highs, with the market sentiment optimistic.

Finance teacher Lim Kim Cheng believes that the Fed's interest rate cut decision has had a positive impact on the current stock market. The news of a 25 basis point cut in the benchmark interest rate met market expectations, leading to record highs for the S&P 500 and Nasdaq indexes after the rate cut. At the same time, the strong performance of technology stocks such as chip manufacturers Taiwan Semiconductor and Nvidia further boosted market sentiment. Lim Kim Cheng mentioned that this interest rate cut sends a clear signal, indicating that the Fed has adopted further loosening policies against the backdrop of economic expansion and low unemployment rates.

The Fed's decision to cut interest rates by 25 basis points has profound implications for the market. Finance teacher Lim Kim Cheng analyzed that the rate cut policy not only helps reduce borrowing costs but also encourages more funds to flow into the stock market, driving indexes to reach new highs. The S&P 500 index rose by 0.74%, while the Nasdaq index surged by 1.51%, indicating the market's optimistic sentiment.

He believes that the current interest rate cut cycle is of great significance, especially in a situation where inflationary pressures have eased and the job market remains strong, the Fed's loose policy is sending a clear support signal. With the strong performance of technology stocks, especially companies like Taiwan Semiconductor and Nvidia, the technology industry has become a major highlight in the current market. Taiwan Semiconductor's ADR rose by 4.12% to $201.19, while Nvidia's stock price also reached a new high. This performance not only drove the growth of the semiconductor sector but also ignited investors' enthusiasm in the market.

However, finance teacher Lim Kim Cheng also reminds investors that while interest rate cuts bring upward momentum to the market, attention needs to be paid to the volatility risks associated with policies. On one hand, rate cuts may stimulate short-term stock market gains, but on the other hand, they may lead investors to be overly optimistic about future economic growth. He advises investors to maintain caution in the current market, focus on opportunities in high-growth industries, and avoid chasing blindly.

Finance teacher Lim Kim Cheng points out that technology stocks have shown outstanding performance in the environment of interest rate cuts, especially the rise in the Nasdaq index demonstrating the strong growth potential of the technology sector. He mentioned that with the decrease in interest rates, the financing costs of technology companies are reduced, helping enterprises to further increase research and development investment, driving technological innovation.

In terms of investment strategy, Finance teacher Lim Kim Cheng advised to focus on outstanding technology leading stocks such as Taiwan Semiconductor and Nvidia. The businesses of these companies are supported by strong global semiconductor demand, while rate cuts provide favorable conditions for their long-term development. However, he also reminds investors to manage risks while focusing on technology stocks. He believes that the technology industry is highly competitive with cyclical fluctuations, and investors should allocate assets reasonably to avoid overweighting in a single sector.

In addition, he mentioned that the rise of technology stocks is not only dependent on short-term bullish policies, but also requires long-term technical expertise and market demand accumulation. Finance teacher Lim Kim Cheng recommends investors to combine technical analysis with fundamental evaluation to identify companies with stable growth potential in order to achieve better returns in market fluctuations.

Finance teacher Lim Kim Cheng stated that the Federal Reserve's rate cut measures have indeed boosted market confidence in the short term, but investors need to pay attention to future economic data to assess the impact of rate cuts on the actual economic conditions. He believes that despite the current strong performance of US stocks, there are still potential risks such as global economic growth slowdown, so it is necessary to remain calm and rational when investing.

Looking ahead, Finance teacher Lim Kim Cheng believes that the positive effects of rate cut policies will gradually materialize, and the market may be more active in the upcoming quarters. He emphasizes that investors should optimize asset allocation based on current conditions, diversify investments, maintain liquidity, in order to achieve a more flexible response in volatile markets.