Dow surges 338 points as Federal Reserve hints at pace of tapering and timing of rate hikes
Dow Jones Industrial Averageon Wednesday broke a four session losing streak. Stocksclimbed as the Fed suggested the economy has recovered enough to withstand policy changes.
- The Fed said it expects to start tapering asset purchases "soon."
Stocks surged Wednesday after the
The Dow Jones Industrial Average jumped about 340 points and broke a string of four consecutive losses and the S&P 500 gained after falling in three of the past four sessions.
The Federal Open Market Committee held interest rates near zero and held the size of its emergency asset purchases steady. The recovery in the economy since the pandemic outbreak led officials to say they are moving closer to reducing policy aid.
"If progress continues broadly as expected, the Committee judges that a moderation in the pace of asset purchases may soon be warranted," the central bank said.
Here's where US indexes stood at 4:00 p.m. on Wednesday:
- S&P 500: 4,395.62, up 0.95%
- Dow Jones Industrial Average: 34,258.32, up 1% (338.48 points)
- Nasdaq Composite: 14,896.85, up 1.02%
"We weren't surprised to see the Fed tee up November as the likely beginning of tapering as they have previously highlighted the higher-than-expected inflation numbers and were only waiting for the job market to improve before beginning to reduce their bond purchases," said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance, in a note Wednesday.
"Although there may be some additional turbulence this fall, we are constructive on the US economy in general and believe that any dips would be worth buying as the fundamentals are still sound and recession appears to be more than a year away at this point," he said.
Retail investors pushed $1.9 billion into US stocks during the Evergrande-driven selloff on Monday, data from VandaTrack show, the fourth-biggest day of net purchases since the start of the pandemic.
Dogecoin fans stormed a poll by AMC CEO Adam Aron on Twitter asking if the theater chain should accept the meme-token as payment.
Gold declined by 0.3% to $1,768.27 per ounce. The yield on the US 10-year Treasury note fell to 1.32%. Bond yields fall as prices rise.
Oil prices popped higher. West Texas Intermediate crude gained 2.7% to $72.17 per barrel. Brent oil, oil's international benchmark, picked up 2.4% to $76.13.
Bitcoin leapt 6.9%, trading near $43,410.
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