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Indexes rose Thursday to continue their post-election rally after the Fed cut rates.
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The Fed cut rates by 25 basis points, a smaller step compared to the September meeting.
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The central bank appears a little more focused on inflation as CPI data remains sticky.
Indexes closed higher on Thursday, extending their post-election rally after the Federal Reserve cut interest rates at the end of its latest policy meeting.
The Nasdaq rose 1.5% to a new record, while the S&P 500 rose 0.8% to a new record. The Dow Jones Industrial Index was essentially flat after rising more than 1,500 points Wednesday.
Here’s where the US indexes stood at 4pm on Thursday:
Major indexes rose as the Fed cut rates by 25 basis points, which was widely expected after an initial 50 basis point cut in September.
Chairman Jerome Powell said the Fed will remain dependent on data but is prepared to adjust the pace of easing as necessary.
While some noted after the meeting that the Fed’s tone may have sounded less confident about the path of inflation, noting that “progress” has been made rather than the previous wording of “further progress,” analysts were not concerned to assure.
“The Committee had used this language as a threshold for starting austerity, so we interpret its removal as a reflection of the fact that the austerity cycle is already underway, and not as an indication of reduced confidence in the inflation outlook,” they say analysts from Goldman Sachs. said in a note Thursday.
The CPI figures are slightly above the Fed’s 2% target, with the latest report showing inflation cooled in September, but less than economists expected.
The labor market, on the other hand, appears to be a smaller source of stress for the Fed, but Powell said it is “prepared to adjust the pace and destination” of the easing as employment numbers evolve.
“There appears to be less concern about the risk of rising unemployment and slowing job growth,” Brian Coulton, chief economist at Fitch Ratings, said in a note Thursday.
The latest employment data, released Thursday, shows weekly unemployment claims rose slightly to 221,000, up 3,000 from the previous week and in line with expectations.
Investors appear hopeful that Trump’s light regulatory stance and proposals for corporate tax cuts will create a friendlier business environment. Evercore ISI predicted this week that the S&P 500 will rise 11% next summer as the rally accelerates in Trump’s second term.
Powell said the election outcome will have “no effect” on Fed policy for the foreseeable future and reiterated that the Fed does not speculate on the potential impact of an administration on the economy.
Here’s what else is going on:
In commodities, bonds and crypto:
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Oil futures rose. West Texas Intermediate crude rose 0.5% to $72.06 a barrel. Brent crude, the international benchmark, rose 0.7% to $75.42 per barrel.
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Gold rose 1.4% to $2,713.80 an ounce.
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The ten-year government bond fell by nine basis points to 4.335%.
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Bitcoin rose slightly to $76,505.
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