US STOCKS – Wall St ends higher as Fed keeps three rate cuts on the horizon…..
Wall Street’s main stock indexes closed higher on Wednesday after the Federal Reserve eased investor jitters by keeping borrowing costs unchanged and reinforcing expectations that rates could be cut as many as three times this year. The Fed’s policy statement described inflation as remaining “elevated,” and it raised economic projections for economic growth and lowered its projection for the unemployment rate from estimates it provided in December.
Stocks added to gains after Fed Chair Jerome Powell said in a press conference that despite recent inflation data coming in hotter than expected, the numbers “haven’t really changed the overall story, which is that of inflation moving down gradually, on a somewhat bumpy road.” Strategists said Wall Street was reassured by Powell’s comments on inflation and the labor market and his signal that the Fed will slow the pace of its drawdown of bond holdings.
The Dow Jones Industrial Average <.DJI> rose 401.37 points, or 1.03%, to 39,512.13, the S&P 500 <.SPX> gained 46.11 points, or 0.89%, to 5,224.62 and the Nasdaq Composite <.IXIC> gained 202.62 points, or 1.25%, to 16,369.41. Nine of the S&P’s 11 major sectors advanced, with five of them climbing more than 1%. Consumer discretionary <.SPLRCD> led the way with a 1.5% gain. The health sector <.SPXHC> was the weakest, falling 0.23%. In healthcare, U.S.-listed shares of BioNTech dropped 4.4% after it reported a 2023 revenue and earnings plunge as it shifted focus to cancer drug development. Shares of COVID-19 vaccine makers Moderna fell 1.9% while Novavax dropped 2.2%.
The biggest boost to the consumer discretionary sector was Amazon.com, whose shares gained 1.3%. Adding to this was Tesla , which gained 2.5% after confirming to Reuters that it will raise the price of its China-produced Model Y vehicles by 5,000 yuan ($694.55) from April 1. Also in the consumer sector, Chipotle Mexican Grill shares climbed 3.5% after the company said its board had approved a 50-for-1 split of common stock. Equinix shares eased 2.3% after Hindenburg Research said it has taken a short position in the data center operator.
Advancing issues outnumbered decliners by a 3.76-to-1 ratio on the NYSE which showed 633 new highs and 71 new lows. The S&P 500 posted 81 new 52-week highs and one new low while the Nasdaq recorded 251 new highs and 101 new lows. On U.S. exchanges, 11.67 billion shares changed hands compared with the 12.2 billion average for the last 20 sessions.
Reporting by Sinéad Carew in New York, and Bansari Mayur Kamdar and Shashwat Chauhan in Bengaluru Editing by Maju Samuel and Matthew Lewis.
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