Investors poured into tech stocks at one of the fastest clips of the year a day after the Federal Reserve cut its benchmark interest rate for the first time since 2020.

Led by a 7.4% gain in shares of Tesla and a 4% jump in Nvidia, the Nasdaq rose 2.5% on Thursday, its fourth-sharpest rally of 2024. The biggest gain of the year for the tech-heavy index was a 3% increase on Feb. 22.

Lower interest rates tend to benefit tech stocks, because reduced borrowing costs and bond yields make risky bets more attractive. In addition to the central bank’s half-point reduction, the Federal Open Market Committee indicated through its “dot plot” the equivalent of 50 more basis points of cuts by the end of the year, eventually coming down by 2 percentage points beyond Wednesday’s move.

While the Nasdaq has been on a steady rise this year, powered by Nvidia and the enthusiasm around artificial intelligence, Thursday’s rally pushed the benchmark to its highest since mid-July. The Nasdaq peaked at 18,647.45 on July 10, and it’s now just 3.5% shy of that level, closing at 18,013.98.

Nvidia, whose processors are powering the generative AI boom and services like OpenAI’s ChatGPT, gained 4% on Thursday to $117.87. The shares are up about 138% for the year after more than tripling in 2023, though they’re still 13% below their all-time high reached in June.

Nvidia counts on a relatively small group of customers — namely Microsoft, Meta, Alphabet, Amazon, Oracle and OpenAI — for an outsized amount of revenue because those are the companies either developing large language models, hosting big AI workloads or doing both. Any sign of slackening demand creates concern around Nvidia’s stock.

But lower rates are seen as another potential boon.

Fellow chipmakers Advanced Micro Devices and Broadcom also rallied big on Thursday, gaining 5.7% and 3.9%, respectively. AMD is trying to challenge Nvidia in the AI market, but it’s far behind and has some skeptics on Wall Street. The stock is only up about 6% this year.

AMD CEO Lisa Su told CNBC’s Jim Cramer on Wednesday that AI is a very long game, and we’re at the early stages.

“Let’s not be impatient. Tech trends are meant to play out over years, not over months,” Su said. “We’ve only been in this, let’s call it, ChatGPT world for maybe like 18 months. We’re all learning. It’s fun. We all use it.”

Su said AI is going to make its way into “all aspects of our lives,” including education and drug development.

“The beauty of all this is you need the computing, and that’s what we do,” Su said.

Tesla was the biggest gainer among tech’s megacap companies on Thursday, gaining 7.4%. The electric car maker has been a relative laggard for the year, down almost 2%, compared to the Nasdaq’s 20% gain. However, Tesla is up 72% from its low for the year in April.

Among the other top tech companies, Apple and Meta also closed with big gains, each rising almost 4%.

WATCH: Cramer’s interview with AMD CEO Lisa Su

Elon Musk’s X faces steep daily fines in Brazil for allegedly evading a ban on the service there, according to a statement from the country’s supreme court on Thursday.

The fines, imposed by Brazil’s supreme court (Supremo Tribuno Federal or STF) amount to $5 million in Brazilian reals, about $920,000, a day. The court said it would continue to impose “joint liability” on Starlink, the satellite internet service owned and operated by SpaceX, Musk’s aerospace venture.

The suspension of X in Brazil was initially ordered by the country’s chief justice Alexandre de Moraes at the end of August, with orders upheld by a panel of justices in early September. The court found that under Musk, X had violated Brazilian law, which requires social media companies to employ a legal representative in the country and to remove hate speech and other content deemed harmful to democratic institutions. The court also found that X failed to suspend accounts allegedly engaged in doxxing federal officers.

X recently moved to servers hosted by Cloudflare, and appeared to be using dynamic internet protocol addresses that constantly change, enabling many users in Brazil to access the site. In a previous setup, the company had used static and specific IP addresses in Brazil, which were more easily blocked by internet service providers at the order of regulators.

Musk, who owns the company formerly known as Twitter, has been lashing out at de Moraes for months, and continued to do so after the order was issued. He’s characterized de Moraes as a villain, comparing him to Darth Vader and Harry Potter character Voldemort. He has also repeatedly called for de Moraes to be impeached.

Brazil previously withdrew money for fines it levied against X from the accounts of X and Starlink at financial institutions in the country. The new fines will begin as of Sept. 19, with the court calculating a total based on “the number of days of non-compliance” with its earlier orders to suspend X nationwide.

While Musk presents himself as a free speech absolutist, X has acquiesced to requests to remove profiles and posts in countries including India, Turkey and Hungary.

Musk and X may be in the process of complying with Brazil’s takedown orders as well. Correio Braziliense, a Brazilian publication, reported on Wednesday that X has started blocking accounts as per suspension orders issued by the country’s supreme court.

Among the apparently banned accounts were those of some internet influencers who are reportedly being investigated for spreading misinformation and promoting attacks against democratic institutions in Brazil. 

X said it wasn’t intending to restore access for Brazilian users.

“When X was shut down in Brazil, our infrastructure to provide service to Latin America was no longer accessible to our team,” a company spokesperson told CNBC on Wednesday. “To continue providing optimal service to our users, we changed network providers. This change resulted in an inadvertent and temporary service restoration to Brazilian users. While we expect the platform to be inaccessible again in Brazil soon, we continue efforts to work with the Brazilian government to return very soon for the people of Brazil.”

Brazil’s national telecommunication agency, Anatel, has been ordered by de Moraes to prevent access to the platform by blocking Cloudflare, as well as Fastly and EdgeUno servers, and others that the court said had been “created to circumvent” a suspension of X in Brazil.

Cloudflare didn’t immediately respond to a request for comment, but the company is reportedly cooperating with authorities in Brazil.

Before the suspension, X had an estimated 22 million users in Brazil, according to Data Reportal.

WATCH: X is a financial ‘disaster’

HEFEI, China — There’s yet another Chinese electric car aiming to undercut Tesla, with a steeper discount.

Onvo, the lower-priced brand launched by premium electric car company Nio, announced its first car, the L60 SUV, would start as low as 149,900 Chinese yuan ($21,210) when buying battery services via a monthly subscription, starting at 599 yuan. That’s the equivalent to just over $1,000 a year for “renting” the battery.

A model with the battery and the car starts at 206,900 yuan. Deliveries are set to begin Sept. 28.

Nio shares briefly rose by more than 3.5% in U.S. trading Thursday after the Onvo L60 launch.

The L60’s new price is even less than what the company announced previously. When Nio launched the Onvo brand in May, the company said the L60 would start selling at 219,900 yuan versus Tesla’s Model Y at 249,900 yuan.

Nio CEO William Li told CNBC in an exclusive interview Thursday that he hoped to launch Onvo in Europe as soon as next year, but he did not have a specific timeframe to share.

He said the lower-priced brand would help the company better reach a global market, due to growing tariffs and other challenges for the premium Nio brand to reach its target overseas markets of Europe and the U.S.

As for whether Onvo would cannibalize the Nio-branded sales, Li said the two brands are aimed at very different price segments. He noted how Nio’s deliveries have improved since the company announced its plans for Onvo.

China’s electric car industry has become fiercely competitive over the last few years, with Nio and other companies vying for part of Tesla’s market share.

Geely-backed Zeekr is set to launch its first midsize electric SUV, the Zeekr 7X, in China on Sept. 20, starting at 239,900 yuan.

Xpeng in late August announced its mass market brand Mona would begin sales of its M03 electric coupe in China. The basic version starts at 119,800 yuan, with a driving range of 515 kilometers (320 miles) and some parking assist features.

A version of the Mona M03 with the more advanced “Max” driver assist features and a driving range of 580 kilometers will sell for 155,800 yuan.

In comparison, Tesla’s cheapest car — the Model 3 — costs 231,900 yuan in China, after a price cut in April.

Chinese electric car companies have gradually expanded overseas, often starting with Europe. However, the European Union is nearing the end of a process that would increase tariffs on imported Chinese-made battery electric cars starting in early November. The bloc began an investigation into the Chinese EV makers’ use of subsidies last year.

Nio cooperated with the EU’s probe but was not sampled, meaning its cars would be subject to a 20.8% duty, as of a July announcement from the European Commission. That’s higher than the 19.9% tariffs slated for Geely cars, and 17.4% for BYD’s.

In the fourth quarter, Nio plans to start deliveries in the United Arab Emirates, Li told investors on an earnings call on Sept. 5.

“Because of the tariff in Europe now, selling or exporting cars from China to Europe becomes more expensive,” Li said, according to a FactSet transcript.

“So we will focus on the existing five European markets that we have already started. We also know that to establish NIO such a premium brand in the European market will also take a longer time, and we are very patient with that.”

“But in the meantime, it doesn’t mean that we have stopped our activities there,” Li said. “Earlier this year, we have just opened our NIO house in Amsterdam, and we are still installing and deploying our power swap stations in Europe.”

He expects the L60 to reach 10,000 monthly deliveries in December, and 20,000 vehicle deliveries a month next year. He anticipates 15% vehicle margin on the new Onvo-branded cars.

The brand aims to have more than 200 stores in China by the end of this year, and already opened more than 100 as of early September.

Li said on the earnings call that Onvo and Firefly, an even lower-priced brand set to begin deliveries next year, would look to release vehicles for the international market.

— CNBC’s Sonia Heng contributed to this report.