by Sinéad Carew and Amruta Khandekar
(Reuters) – The New York Stock Exchange ended sharply higher on Thursday, the day after the meeting of the Federal Reserve (Fed) which fueled hopes that the American central bank had completed its cycle of monetary tightening, while Company results and forecasts added to investor optimism.
The Dow Jones index gained 1.70%, or 564.50 points, to 33,839.08 points.
The broader S&P-500 gained 79.92 points, or 1.89%, to 4,317.78 points.
The Nasdaq Composite advanced 232.72 points (1.78%) to 13,294.19 points.
The S&P-500, which is the fourth consecutive session in the green, recorded its largest one-day percentage increase since last April. The Nasdaq, for which this is the fifth session of increase in a row, experienced its largest daily jump since July.
As expected, the Fed announced Wednesday at the end of its two-day monetary policy meeting that it was keeping its interest rates unchanged. If the president of the American central bank, Jerome Powell, opened the door to additional increases, he also noted the impact of rising bond yields on the economy.
Perceived as a signal that the Fed had finished the cycle of monetary tightening started in March 2022 to stem inflation, these comments caused a fall in the yield on US Treasury bonds this Thursday.
According to Justin Burgin, vice president of Ameriprise Financial in Michigan, Jerome Powell’s comments at a press conference Wednesday were “what everyone wanted to hear.”
He also highlighted the better-than-expected quarterly results, saying analysts still expected growth for the current quarter despite forecasts being lower than previously expected.
Apple published its quarterly results after the close.
Wall Street anticipates growth in current quarter results of 7.2% year-on-year, compared to +11% at the start of October, according to LSEG data.
Turning to the third quarter, 80.9% of S&P-500 companies reporting results beat analysts’ expectations, as earnings season approaches its home stretch.
After the monthly decline of the main Wall Street indices in October, the circumstances were perfect for a “relief” session this Thursday, commented Emily Leveille, portfolio manager at Thornburg Investment Management.
She said investors were reassured by hints from the Fed of an extended pause in its monetary tightening campaign.
The vast majority of traders expect the US central bank to keep rates unchanged again in December.
All major sectors of the S&P-500 ended the session in the green, led by energy and real estate, up more than 3%.
On the value side, Starbucks jumped 9.5% after publishing quarterly results better than expectations.
Qualcomm gained 5.8% following better-than-expected sales and profit forecasts for the current quarter. PayPal gained 6.6% in the wake of an upwardly revised annual profit forecast.
(French version Jean Terzian)
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