by Chibuike Oguh
NEZ YORK (Reuters) – The New York Stock Exchange ended higher on Wednesday as the U.S. Federal Reserve left interest rates unchanged but further paved the way for a fall in borrowing costs in September, as financial markets had hoped.
The Dow Jones index gained 0.24% to 40,842.79 points.
The broader S&P 500 gained 1.58% to 5,522.30 points.
The Nasdaq Composite rose 2.64% to 17,599.40 points.
These are the highest percentage increases in a session for the S&P 500 and the Nasdaq since February 2022.
For the month of July as a whole, the S&P 500 is up 1.1%, the Dow Jones is up 4.4% while the Nasdaq is down 0.8%.
At the end of its two-day meeting, the Fed on Wednesday opened the door to an easing of its monetary policy, to end the cycle launched in March 2022 to counter the surge in inflation.
A rate cut was mentioned during the discussions but was not yet considered appropriate.
US Federal Reserve Chairman Jerome Powell said at a news conference that the “moment when rates will go down is getting closer,” while again noting that the institution remains dependent on economic data.
“It was the worst-kept secret on the planet that the Fed was not going to cut rates in July,” said Jake Dollarhide, managing director of Longbow Asset Management in Tulsa, Oklahoma.
He added that he expects the Fed to cut rates by 25 to 50 basis points, but said it would not be surprising if investors have already factored that prospect into stock valuations.
Seven of the 11 major sectors of the S&P 500 ended the session in the green, led by technology. Health care and real estate were among the sectors in the red.
Nvidia jumped nearly 13%, as rival Advanced Micro Devices’ annual sales forecast rose 4.3%.
The day after reporting quarterly results, Microsoft fell 1% after reporting massive spending on artificial intelligence (AI).
Meta, which was due to report results after the close, ended higher. Apple and Amazon, other tech giants that will report quarterly results on Thursday, also rose.
(Written by Jean Terzian)
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