Wall Street’s main stock indexes gained ground on Wednesday after the Federal Reserve said it was keeping borrowing costs unchanged and indicated that it still expects to cut rates by three-quarters of a percentage point by the end of 2024.
However, the Fed’s policy statement described inflation as remaining “elevated,” and it updated quarterly economic projections to forecast growth of 2.1% for the year versus 1.4% projected in December and an unemployment rate ending the year at 4%, lower than the 4.1% anticipated in December.
Investors will look for more clues about the path for interest rates in Chair Jerome Powell’s press conference, due to start at 2:30 p.m. EDT (1830 GMT).
“The market is relieved that the Fed is still projecting three rate cuts this year. Recent too-hot inflation readings have not derailed the Fed’s plan so far,” said Irene Tunkel, chief U.S. equity strategist at BCA Research in Sarasota, Florida.
“This is consistent with the baseline market expectations and is only marginally positive for equities as this scenario is fully priced in. This is a ‘no-harm-done’ outcome.”
The indexes had rallied to record highs this month on optimism around artificial intelligence, but had retreated slightly in recent weeks after reports showing robust inflation shook confidence that the Fed would start rate-easing soon.
At 2:12 p.m. EDT the Dow Jones Industrial Average rose 127.22 points, or 0.33%, to 39,237.98, the S&P 500 gained 14.30 points, or 0.28%, to 5,192.81 and the Nasdaq Composite gained 79.55 points, or 0.49%, to 16,246.35.
Seven of the 11 major S&P 500 sectors were advancing with materials the biggest gainer, up 0.7% and healthcare lagging most and last down 0.6%.
Source: https://finance.yahoo.com/news/us-stocks-wall-st-gains-182441629.html
