Wall Street roared higher Wednesday after the Federal Reserve cut interest rates by a quarter-percentage point and Chairman Jerome Powell all but shut the door on any future hikes.
The dovish messaging from the Dederal Reserve, along with forecast of stronger-than-earlier-projected economic growth, sent investors charging back into equities.
The Dow Jones Industrial Average rose 1.1 percent, finishing less than 200 points from a record. The S&P 500 gained 0.7 percent, ending just five points shy of an all-time high, while the Nasdaq added 0.3 percent.
The Fed’s third cut of the year moved its key policy rate down to 3.5 percent to 3.75 percent, a result traders had priced in. But Powell’s tone did the real heavy lifting.
“I don’t think that a rate hike…is anybody’s base case at this point,” Powell said. “I’m not hearing that.”
Treasuries eased in response. The 10-year yield slipped to 4.15 percent from 4.19 percent Tuesday, retreating after briefly touching 4.21 percent—its highest level since early September. Softer yields helped fuel the stock surge by lowering borrowing costs across the board.
With records now within arm’s reach and the Fed signaling patience, investors ended the day betting the central bank’s easing cycle still has momentum.
