• Heightened expectations of Fed rate cuts boost stock markets on Thursday.
• Energy sector outperforms rivals boosted by rallying oil prices.
• All 11 major S&P 500 sectors start the day in the positive territory.

As hinted by the strong upsurge witnessed in the S&P 500 Futures, major equity indexes in the U.S. started the day sharply higher and the broad S&P 500 reached a fresh record high. The FOMC's dovish shift in its policy statement yesterday revived hopes of the bank cutting interest rate as soon as July and provided a boost to global stock markets. As of writing, the Dow Jones Industrial Average was up 0.9% on the day while the S&P 500 and the Nasdaq Composite were adding 0.95% and 1.3%, respectively. 

Among the 11 major S&P 500 sectors, which are all in the positive territory in the early trade, the Energy Index is rising nearly 2% to lead the rally on the back of a 4% increase in crude oil prices. On the other hand, the rate-sensitive Financial Index is only adding 0.05% on the day limited by falling Treasury bond yields.

Reviewing the FOMC event, “Overall, our econ team expects conditions to evolve sufficiently to warrant a cut in July, and view a 25bps move as more likely than 50bps, and they continue to anticipate a total of three rate cuts this year,” said Deutsche Bank analysts.