US Stock Market Rises as Federal Reserve’s Dovish Turn Boosts Optimism for Rate Cuts

The US stock market continued to rise slightly to close the session. The US Federal Reserve’s dovish turn has increased optimism that interest rates will fall next year. Photograph taken in March 2022 (2023 Reuters/Brendan McDermid)

NEW YORK (Reuters) – The U.S. stock market continued to improve slightly, with the Dow Jones Industrial Average (.DJI) hitting a new high for the second day in a row. The US Federal Reserve’s dovish turn has increased optimism that interest rates will fall next year.

Apple ( AAPL.O ) pared gains after hitting a record high during the trading session to close 0.08% higher.

Tesla ( TSLA.O ) rose 4.9% on volume of about $40 billion. Volume was more than double that of second-place Nvidia (NVDA.O). Nvidia rose 0.5%.

Sectors that have underperformed this year were bought, and six of the 11 major sectors in the S&P 500 (.SPX) rose. Energy (.SPNY) led the rise of 2.94%, and real estate (.SPLRCR) rose 2.62%.

The S&P 500 is less than 2% below its all-time high, set in January last year.

Total trading volume on US exchanges reached an unprecedented high of 17.1 billion shares. The average for the last 20 business days was 11.1 billion shares.

The Philadelphia Semiconductor Index (.SOX) rose 2.7% to close at a record high. The Russell 2000 Index (.RUT), which includes small-cap stocks, also rose 2.7%.

The US Federal Reserve (FRB) kept its policy interest rate unchanged at the meeting of the Federal Open Market Committee (FOMC), which lasted until the 13th. Chairman Powell said inflation is falling faster than expected, suggesting that monetary tightening may be over. He acknowledged that discussions regarding cuts in interest rates are emerging. See more

Investors are keeping an eye on trends in the yield on the 10-year US Treasury note, which fell below 4% for the first time since early August following the FOMC statement.

“The market was overbought and we were expecting a consolidation or pause, especially after the big rally the day before,” said Quincy Crosby, chief global strategist at LPL Financial.

“While the market welcomes lower interest rates, it may question why yields are below 4% as it considers the economic outlook.”

Software giant Adobe ( ADBE.O ) fell 6.35%. Full year and quarterly sales forecasts were below market expectations.

It was announced on the same day that US retail sales for November rose 0.3% from the previous month, contrary to market expectations compiled by Reuters for a decline of 0.1%. A strong start to the year-end sales season has further eased recession fears. See more

In the S&P 500, advancing issues outnumbered declining issues by 1.9 to 1. (.AD.SPX)

*For related information, see the “Related Content” menu on the right side of the screen These are provisional values ​​based on LSEG data. US stock market where the previous day’s change may not match

Our Code of Conduct: Thomson Reuters “Principles of Trust”

#stock #market #Dow #hits #record #high #2nd #day #row #interest #rate #cut #expected #Fed #turns #dovish #Reuters