Dow surges over 500 points then plunges after Fed hints next move is rate cut
NY Post
Stocks closed mixed in a volatile session on Wednesday after the Federal Reserve left its key interest rate unchanged, as expected, but indicated that its next move will probably be to cut rates.
The Dow Jones Industrial Average, which had jumped more than 500 points, rose just 87.37 points, or 0.2%, to 37,903.29. The S&P 500 and the Nasdaq both fell 0.3%.
The Federal Open Markets Committee (FOMC) concluded its two-day monetary policy meeting by letting the Fed funds target rate stand at 5.25%-5.50%.
“Powell didn’t rock the boat very much,” said Ryan Detrick, chief market strategist at Carson Group in Omaha. “He acknowledged that inflation is still a problem but remained optimistic that it will improve over the coming quarters.”
“What sparked today’s rally was when he said the next move will not be a hike,” Detrick added. “He pushed back against that, hard. … That allowed the bulls to take charge.”
The accompanying statement left the timing of any rate cut in doubt, and Fed officials underscored their concern that the first months of 2024 have done little to build the confidence they seek in falling inflation.
