US stocks rally as Fed holds rates, prompts hope for end to hikes
economictimes.indiatimes.comWall Street's major indexes closed higher on Wednesday with the Nasdaq's 1.6% advance leading gains, after the U.S. Federal Reserve kept interest
rates unchanged
and comments from its top official fueled investor optimism rate hikes were done even though the central bank left the door open for more.
Fed Chair Jerome Powell said policy makers would proceed carefully although they were not yet confident financial conditions were restrictive enough to get inflation as low as the central bank would like.
Trading was choppy at the start of Powell's press conference but the major equity indexes started to regain lost ground after about 20 minutes, then went on to hit session highs.
This was because the Fed's top official «wasn't as assertive about higher-for-longer» rates as he has been in past press conferences, according to Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.
Charlie Ripley, senior investment strategist for Allianz Investment Management, wrote that while there is still a potential risk for the Fed to raise rates again, Powell's commentary suggests that «the bar has become higher for rate hikes.»
Edward Moya, senior market analyst at Oanda wrote that while Powell insisted he was keeping options open for a hike «he didn't seem very convincing.»
The Dow Jones Industrial Average rose 221.71 points, or 0.67%, to 33,274.58, the S&P 500 gained 44.06 points, or 1.05%, to 4,237.86 and the Nasdaq Composite added 210.23 points, or 1.64%, to 13,061.47.
Among the S&P 500's 11 major sectors only two lost ground with energy falling 0.3% while consumer staples edged down 0.06%.
