Dow, S&P 500 close at records after Fed upgrades its growth outlook and indicates no rates hikes until 2023
- The Dow and the S&P 500 closed at new records after the Federal Reserve reiterated an accommodative policy stance as the economy recovers.
- It's "not yet" time for the
Fedto start talking about reducing asset purchases, says Fed Chairman Powell.
- The 10-year yield eased back from its highest level in 14 months.
"We want to see that labor market conditions have made substantial progress toward maximum employment and inflation has made substantial progress toward the 2% goal," Powell said in an afternoon press conference. "When we see actual data coming in that suggests that we're on track...then we'll say so," and "well in advance of any decision to actually taper."
The Fed at its policy meeting ended Wednesday left its benchmark interest rate unchanged, as expected. The Fed currently buys $120 billion a month in assets in part to help keep the financial system running smoothly as the worldwide pandemic persists.
Here's where US indexes stood at 4 p.m. ET at the close on Wednesday:
- S&P 500: 3,974.16, up 0.29 %
- Dow Jones Industrial Average: 33,016.16, up 0.58% (190.21 points)
- Nasdaq Composite: 13,525.20, up 0.4%
Investors had earlier shoved down high-performing tech stocks as borrowing costs increased as implied by the 10-year Treasury yield. The yield approached 1.7% and reached its highest level since January 2020, which was before the COVID-19 outbreak was declared a pandemic.
The Fed upgraded its economic projections including its view that gross domestic product will expand by 6.5% this year, up from the prior estimate of 4.2%. Economists have said the vaccinations of millions of Americans and the $1.9 billion fiscal stimulus package from Washington are key factors in driving economic recovery. The Fed also indicated that no rate hikes will take place before 2023.
In equities, Uber fell over 4% after the company said late Tuesday it will reclassify drivers in the United Kingdom as "workers," guaranteeing them minimum wage, paid vacation and other benefits.
Legendary investor Bill Gross said he's betting against GameStop stock again after walking away from January's wild volatility with $10 million.
Gold rose 1.09% to $1,751.05 per ounce. Long-dated US treasury yields rose.
Bitcoin rose as much as 4.4% to $58,184.
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