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Zacks Equity Research
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Wall Street closed higher on Wednesday as the Fed left interest rates unchanged and reaffirmed plans for two rate cuts later this year. The Nasdaq Composite, the Dow and the S&P 500 ended in positive territory.
The Dow Jones Industrial Average (DJI) rose 0.9%, or 383.32 points, to close at 41,964.63. Twenty-one components of the 30-stock index ended in positive territory, while 9 ended in negative. The major gainer of the Dow was The Boeing Company BA. The stock price of this aerospace and defense company rose 6.8%. Boeing currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The tech-heavy Nasdaq Composite advanced 246.67 points, or 1.4%, to close at 17,750.79.
The S&P 500 gained 60.63 points, or 1.1%, to close at 5,675.29. Ten of the 11 broad sectors of the benchmark index closed in the green. The Consumer Discretionary Select Sector SPDR (XLY), the Energy Select Sector SPDR (XLE) and the Industrials Select Sector SPDR (XLI) rose 1.9%, 1.6% and 1.3%, respectively.
The fear gauge CBOE Volatility Index (VIX) decreased 8.3% to 19.90. A total of 13.53 billion shares were traded on Wednesday, lower than the last 20-session average of 16.34 billion. The S&P 500 posted seven new 52-week highs and one new low. The Nasdaq Composite recorded 33 new highs and 114 new lows.
On Wednesday, the Federal Reserve left its benchmark interest rate unchanged in the 4.25%-4.50% range, citing heightened economic uncertainty stirred up by the Trump administration’s trade wars. Fed Chair Jerome Powell said that import tariffs may slow down growth and possibly increase inflation in the short run, but he indicated that there could be two cuts later this year. Moreover, the Fed also changed its balance sheet reduction plan, tapering the runoff of Treasuries to $5 billion a month while keeping the cap on mortgage-backed securities unchanged.
The Fed cited rising economic uncertainty, moderating consumer spending and tariff-induced potential inflation as key factors. Jerome Powell, chair of the central bank, said that the central bank would have to keep rates high if inflation stays high but would cut rates if economic conditions worsen. The outlook for future rate cuts depends on economic data, with one potential policy influencer being the April 2 tariff review.
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