Stock Market Today: Dow closes above 37K for first time ever as Fed turns dovish

investing.com:

Investing.com — The Dow closed at record high Wednesday after the Federal Reserve's decision to keep rates unchanged, but forecast deeper rate cuts for next year, pushed growth stocks including tech sharply as Treasury yields slumped.

By 16:00 ET (21:00 GMT), the Dow Jones Industrial Average was up 506 points to close at record high of 37,084.78. The S&P 500 was up 1.4%, and NASDAQ Composite jumped 1.4% to an all time high.

The Federal Reserve kept interest rates steady on Wednesday for the third straight meeting, and signaled that inflation is expected to cool faster than initially anticipated, setting up potential cuts next year.

Fed members estimated that the benchmark rate will fall to 4.6% next year, suggesting three rate cuts in 2024, from a prior projection of 5.1%, or two rate cuts.

«The dot plot chart indicates three rate cuts in 2024, with the futures curve pricing in four rate cuts next year,» Steve Miley, COO and Chief Analyst at TradeDay told Investing.com in an email.

About 60% of traders expect the Fed to cut as soon as March, compared with about 40% a day earlier, according Investing.com's Fed Rate Monitor Tool.

Treasury yields fell sharply following the Fed decision, with the yield on the two-year Treasury falling 28 basis points to 4.447% and 19 basis points on the 10-year Treasury to 4.024%

The move lower in Treasury yields, which trade inversely to price, is expected to continue into the holiday through year end into early 2024, Miley said, paving the way for further gains in stocks.

«We expect the positive correlation between stocks and US bonds seen through November to encourage significant gains for equities, for a Santa rally in stocks to extend through into January, as the major US stock averages