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A trader reacts as a screen shows the Fed rate forecast on the floor of the New York Stock Exchange (NYSE) in New York City, US, December 13, 2023.
Brendan McDermid | Reuters
The Dow Jones Industrial Average jumped more than 300 points and was on pace for a record close on Wednesday as the Federal Reserve signaled it would cut rates by more than the dollar. first.
The 30-stock Dow added 232 points, or 0.6%, to 36,810, which will exceed its previous record closed in January of 2022. S&P 500 jumped 0.6% with bank shares and real estate sales on the way, but the Nasdaq Composite up 0.5%.
The central bank kept the overnight lending rate at 5.25% to 5.5% as expected, but more importantly it foresees three rate cuts in 2024, which was more than the first exposure.
The statement of the meeting of the Fed showed that the economy “has moderated” in the past year and the central bank has officially reduced its forecast of prices for 2024, seeing 2.4% in down from 2.6%.
“I would say we’ve seen a pivot as they’ve shown the decline in inflation,” said Gina Bolvin, president of Bolvin Wealth Management Group. “It looks like the Fed is moving in the direction of the markets, rather than the market moving towards the Fed. The Santa Claus campaign can continue.”
Investors are waiting for Fed Chairman Jerome Powell’s statement for an indication of how quickly a rate cut can be expected at 2:30 pm EST.
Wall Street also considered the latest price data. The index of manufacturing costs was unchanged in November after decreasing 0.4% in October, said the US Bureau of Labor Statistics. Investors surveyed by Dow Jones had predicted a rise of 0.1%.
Share of Pfizer pulled back more than 8%, touching a 10-year low, after the company released profit and revenue data that were below Wall Street. Tesla the stock fell 1.4% after 2 million vehicles were recalled due to regulatory concerns related to its Autopilot system.
Investors are coming from the fourth straight series. The Dow and S&P 500 hit their highest intraday levels since January 2022. The Nasdaq Composite hit its highest level since April 2022.