Wall St ends higher, Treasury yields hit multi-month lows in Fed's wake

investing.com:

By Stephen Culp

NEW YORK (Reuters) -U.S. stocks pared earlier gains to close modestly higher on Thursday, while benchmark Treasury yields dropped to multi-month lows after investors rotated out of momentum growth stocks following the U.S. Federal Reserve's dovish pivot.

The dollar hit a two-week low against the euro and more than a four-month low against the yen.

The three major U.S. stock indexes gyrated, reclaiming positive territory by mid-afternoon the day after the Fed's much-anticipated policy decision to leave interest rates unchanged while saying that historic rate cuts are likely over.

«We had the pleasant dovish surprise from the Fed yesterday, and after a huge start to the month of December we’re seeing a little consolidation,» said Ryan Detrick, chief market strategist at Carson Group in Omaha, Nebraska. «But under the surface we're seeing extreme strength from small caps and mid caps while large caps catch their breath, potentially a sign this bull market is broadening out with more stocks participating.»

On Wednesday, the Fed indicated its tightening phase was at an end and signaled that rate cuts are in the cards for 2024, sending the Dow to an all-time closing high.

All three major U.S. indexes remain on course for their seventh straight weekly gains.

In a busy day for central banks, the European Central Bank (ECB) also held interest rates steady but pushed back against the notion of rate cuts. The Bank of England echoed the ECB, insisting interest rates would be elevated «for an extended time.

Elsewhere, the Swiss National Bank held rates firm but lowered inflation forecasts, while Norway's central bank surprised with a rate hike.

On the economic front, U.S. retail sales unexpectedly rebounded in