Stocks rally to records on Wall St.
U.S. stocks rallied to records Wednesday after the Federal Reserve indicated it’s likely to deliver the cuts to interest rates this year that Wall Street craves, despite some reports of discouragingly high inflation.
The S&P 500 jumped 46.11 points, or 0.9%, to 5,224.62 and set an all-time high for a second straight day. It’s already run up 9.5% so far in this young year, which is a bit better than the average for a full year over the last two decades.
The Dow Jones industrial average jumped 401.37 points, or 1%, to 39,512.13, and the Nasdaq composite roared 202.62 points higher, or 1.3%, to 16,369.41. Both also hit records.
Some of Wall Street’s nervousness coming into the day washed away after the Fed released a survey of its policymakers, that showed the median still expects the central bank to deliver three cuts to interest rates in 2024.
Fed Chair Jerome H. Powell noted the last two months’ worse-than-expected reports but said they “haven’t really changed the overall story, which is that of inflation moving down gradually on a sometimes bumpy road towards 2%. That story hasn’t changed.”
Fed officials upgraded their forecasts for the U.S. economy’s growth this year, while also indicating they may end up keeping its main interest rate higher in 2025 and 2026 than earlier thought.
In the bond market, Treasury yields had a mixed reaction. The two-year Treasury yield, which tracks expectations for Fed action, fell to 4.61%, down from 4.69% late Tuesday.
The yield on the 10-year Treasury ended at 4.28%, down from 4.30% late Tuesday.