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U.S. stock indexes jumped Wednesday after the Federal Reserve kept rates steady and mapped out a fresh path for rates in 2024. The focus now turns to Chairman Jerome Powell’s press conference later in the session.
How stock indexes are trading
-
The Dow Jones Industrial Average
DJIA
jumped 203 points, or 0.6%, near 36,780. -
The S&P 500
SPX
was 28 points higher, or 0.6%, at 4,672. -
The Nasdaq Composite
COMP
was up 88 points, or 0.6%, near 14,627, after earlier turning negative.
On Tuesday, the Dow Jones Industrial Average rose 0.5%, while the S&P 500 increased 0.5% and the Nasdaq Composite gained 0.7%.
What’s driving markets
Stocks advanced sharply after the Fed held its short-term policy rate unchanged at a range of 5.25% to 5.50%, with focus now turning to Chairman Jerome Powell’s press conference at 2:30 p.m.
Fed rate decision: Live coverage of FOMC meeting, dot plot and Powell press conference
“What I expect is that the Fed would love for the market to take some of these [anticipated rate] cuts out,” said Erik Weisman, chief economist at MFS Investment Management, in an interview. “It’s just not consistent with what they want to portray at the moment.”
The Fed, in a policy statement, signaled it expects to pivot to rate cuts in 2024, with a few officials signaling as much as a cut of 100 basis points to its policy rate. Traders earlier in the session had been pricing in a nearly 50% probability that the Fed will deliver its first quarter-point rate cut by May, according to the CME FedWatch Tool.
The European Central Bank and the Bank of England also are due to give policy updates this week.
Weisman at MFS Investment Management said he expects Powell to address easing financing conditions over roughly the past six weeks, with 10-year Treasury yields
BX:TMUBMUSD10Y
falling from a 5% October peak.
The 10-year rate tumbled 13 basis points to 4.07% after the Fed decision.
“Financial conditions are a lot looser and this is going to demand an explanation,” Weisman said.
See: Fed will try to ‘Keep calm and carry on’ amidst talk of steep rate cuts and recession
In economic data, U.S. wholesale prices were unchanged in November in another sign of gradually easing inflation, the Bureau of Labor Statistics said Wednesday. Economists polled by the Wall Street Journal had forecast a 0.1% increase in the producer-price index.
Demand for mortgages surged this week, fueled by a drop in the 30-year fixed mortgage rate, with some brokers quoting rates below 7%.
Companies in focus
-
LifeMD Inc.’s stock
LFMD,
-7.16%
was down 10% Wednesday after the virtual primary-care provider said it’s teaming up with Medifast Inc.
MED,
-13.26%
to create a clinically supported weight-management program that will include the new class of weight-loss drugs called GLP-1 receptor agonists. -
Pfizer Inc.’s stock
PFE,
-7.79%
fell 17% after the drug company set its 2024 revenue and profit forecast below Wall Street expectations. -
Tesla Inc.’s stock
TSLA,
-1.44%
shed 2.3% Wednesday after news that the electric-vehicle company was recalling more than 2 million vehicles due to Autopilot control issues.
—Jamie Chisholm contributed
