Stock Market Today: Stocks end higher on rate-cut hopes, Google climbs on earnings beat

Updated at 4:39 PM ET by Rob Lenihan

Stocks ended higher Thursday, boosted by a tech rally and hopes of an interest rate cut.

The Dow Jones Industrial Average gained 486 points, or 1.23%, to end the session at 40,093.40, while the S&P 500 rose up 2% to close at 5,484.79 and the tech-heavy Nasdaq added 2.7% to finish the day at 17,166.04.

Shares of Google parent company Alphabet  (GOOGL)  were climbing in after-hours trading as the search engine giant beat Wall Street's earnings and revenue forecasts.

The company earned $2.81 per share, up 49% from a year ago, beating estimates of $2.01, while revenue increased 12% to $90.23 billion and coming in ahead of consensus analyst estimates of $89.12 billion.

CEO Sundar Pichai said the results "reflected healthy growth and momentum across the business.” 

“Underpinning this growth is our unique full stack approach to AI," he said in a statement. "This quarter was super exciting as we rolled out Gemini 2.5, our most intelligent AI model, which is achieving breakthroughs in performance and is an extraordinary foundation for our future innovation.“

Search reported continued strong growth, Pichai said, "boosted by the engagement we’re seeing with features like AI Overviews, which now has 1.5 billion users per month."

"Driven by YouTube and Google One, we surpassed 270 million paid subscriptions," he added. "And Cloud grew rapidly with significant demand for our solutions."

Alphabet is also increasing its dividend by 5% and authorized another $70 billion in stock buybacks.

3:45 p.m. ET

Rate cuts ahead?

Stocks were rising Thursday after after two huge rallies on Tuesday and Wednesday. 

The rally catalyst: Possible rate cuts.

Two Fed officials said Thursday they could see cutting rates if the original Trump tariff levels are reinstated and employers start cutting staff, Christopher Waller, a Fed governor, told Bloomberg Television on Thursday.