by Sinéad Carew and Bansari Mayur Kamdar
(Reuters) – The New York Stock Exchange ended higher on Wednesday after the U.S. Federal Reserve (Fed) reassured investors that it planned to make three interest rate cuts this year, after leaving as expected rates to be unchanged at the end of its monetary policy meeting.
The Dow Jones index gained 1.03%, or 401.37 points, to 39,512.13 points.
The broader S&P-500 gained 46.11 points, or 0.89%, to 5,224.62 points.
The Nasdaq Composite advanced 202.62 points (1.25%) to 16,369.41 points.
Up since the start of the session, the main Wall Street indices climbed further with the Fed’s press release, published in the afternoon, then with the press conference of the president of the American central bank, Jerome Powell.
If the Fed noted in its press release that inflation remained “high” and also revised upwards its growth forecast for the year, Jerome Powell made reassuring comments.
He “didn’t try to dismiss any data but kind of gave the market a reason to ignore the data,” noted Alex Coffey, senior strategist at TD Ameritrade.
Jerome Powell said the recent higher-than-expected inflation data did not change the overall view of the situation, which is that “inflation is gradually falling,” with some ripples.
The Fed boss also indicated that the central bank would reduce the pace of liquidation of its bond portfolio.
Ahead of the meeting, “we thought that Jerome Powell could dampen market expectations or move away, because of the data from the last two months, from expectations since December on a more accommodating policy. He was more accommodating than the market might have feared recently,” Alex Coffey said.
Wall Street, which has reached peaks since the start of the year under the influence of the craze for artificial intelligence and in the prospect of a shift in the Fed’s monetary policy, had tensed up earlier this month with data showing continued inflation.
Nine of the eleven major sectors of the S&P-500 ended the session in the green, including five having gained at least 1%. Conversely, health was the worst performing sector, down 0.23%, notably under the effect of the decline of BioNTech after the publication of gloomy annual results. Moderna and Novavax have also declined.
Also note, on the value side, the 1.3% increase in Amazon, while another giant, Tesla, gained 2.5% after confirming the price increase for its Model Y in China.
(Written by Jean Terzian)
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