Wall Street Shatters Records, Fueled by Fed's 'Jumbo Cut'

Fueled by the Federal Reserve's aggressive cut in the benchmark rate on Wednesday, Wall Street set all-time highs Thursday as investors signaled approval of the long-anticipated move.

The Dow Jones Industrial Average and the S&P 500 broke record highs one day after the Fed's 50 basis points reduction in interest rates from 23-year highs. The so-called "jumbo cut" marked the first time the Fed has lowered rates in more than four years.

The S&P topped the 5,700-point mark for the first time with a 1.7% gain, while the Dow exceeded 42,000 behind a 500-point day. Although it failed to complete the major-indices trifecta, the Nasdaq Composite saw the largest gains percentage-wise at 2.5%.

The gains also reflect favorably on the "soft landing" the Fed has been hoping to engineer since out-of-control inflation began crippling the U.S. economy. Now the Fed is monitoring for stagflation and employment while decreasing the rate through 2025.

"The first economic data point since the 'jumbo' rate cut should please the Fed," said Chris Larkin, managing director of trading and investing for E-Trade told CNBC. "Lower-than-expected jobless claims won't raise any immediate concerns about the labor market slowing too much."