Indexes rose Thursday as investors digested Wednesday's jumbo rate cut from the Fed and a fall in weekly jobless claims.

By Saqib Iqbal Ahmed, Suzanne McGee and Carolina Mandl NEW YORK (Reuters) -An initial muted market reaction following the Federal Reserve’s first rate cut in four years gave way to a surge in U.S. stocks as uncertainty ebbed and investors digested the implications of easing monetary policy.

The blue chip index closed above the psychologically significant 42,000 level for the first time ever Thursday.

U.S. stocks rose after the Federal Reserve lowered its benchmark interest rates by 50 basis points to a range of 4.75% to 5%. That was the first rate cut in over four years that marked the beginning of a monetary-easing cycle in the world's largest economy.

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,

Though the S&P 500 briefly touched a new record, equities were mixed as investors remain split over the Fed's interest rate decision on Wednesday.

Stocks surged to open Thursday trading in the wake of the Federal Reserve’s announcement that it was lowering interest rates by half a percentage point.

Stocks were choppy in the lead-up to today's Federal Reserve policy announcement. While the main indexes made a confident move higher after the central bank cut rates by a half-percentage point, a late-day burst of selling pressure sent them into the red at the close.