Wall Street traders propelled stocks to new all-time highs after the Federal Reserve hinted at a potential interest rate cut, marking a significant shift since the pandemic began. The S&P 500 surged past 5,200, driven by speculation that the Fed’s decision to end its aggressive rate hikes will continue to boost corporate profits. This rally was broad-based, with previously lagging sectors like small caps also gaining momentum. Short-term Treasuries performed well, indicating growing expectations of a rate cut possibly happening as early as June.
Policymakers maintained their outlook for three rate cuts in 2024 and signaled a slower pace of reducing their bond holdings, showing confidence despite a recent uptick in inflation. While Fed Chair Jerome Powell emphasized the need for more evidence of price stabilization, he hinted at a potential easing later this year.
Market experts reacted positively to the Fed’s stance, with many seeing it as a green light for further market growth. The tech-heavy Nasdaq 100 rose significantly, led by major companies like Apple Inc. and Tesla Inc. Late-hour announcements, such as Micron Technology Inc.’s strong revenue forecast, added to the market’s optimism.
Analysts weighed in on the Fed’s dovish tone, anticipating rate cuts amid projections of higher inflation and economic growth. This sentiment contributed to a decline in short-term yields and a weaker dollar.
However, some cautioned about the risks associated with potential rate cuts before inflation reaches the target.
In corporate news, Intel Corp. received substantial grants and loans for semiconductor expansion, while Boeing Co. forecasted a challenging first quarter. Topgolf Callaway Brands Corp. denied reports of a potential sale, and Equinix Inc. faced allegations from short seller Hindenburg Research. Chipotle Mexican Grill Inc. proposed a stock split to broaden its investor base after a remarkable stock performance.
Key events to watch include economic data releases and earnings reports from major companies like Nike and FedEx. Market movements show continued optimism, with stocks rising, currencies fluctuating, and cryptocurrencies like Bitcoin and Ether seeing gains. Bond yields remained stable, and commodities experienced mixed trends, reflecting the ongoing dynamics in global markets.
