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.

With the stock market's surge on Thursday to fresh records, something extra has been taking hold of equities in the wake of the Federal Reserve's big rate cut. The "Magnificent Seven" mega-cap technology stocks,

Key Takeaways Homebuilders shares rose after the Fed announced a 50 basis point interest rate cut Wednesday. Bank of America increased its price target for seven hombuilders by an average of 11%. Lennar will report earnings after the bell Thursday,

Falling interest rates can become a tailwind for dividend-paying stocks, including banks but also nonfinancial companies like Delta and United Health.