At the market close, the Dow Jones surged by 512.3 points, marking a 1.4% gain and reaching an unprecedented 37,090.24 points. This record-breaking achievement, the first time surpassing 37,000 points, signifies a historic high for the blue-chip index composed of 30 member stocks.
The S&P 500 index exhibited a 1.37% rise, concluding at 4,707.09 points, surpassing the 4,700-point milestone for the first time since January 2022.
Simultaneously, the Nasdaq index climbed by 1.38%, finishing at 14,733.96 points.
In an anticipated move, the Fed maintained the federal funds rate, holding steady at 5.25-5.5%. Notably, the Fed’s updated “dot plot” forecast now anticipates three interest rate cuts in the next year—surpassing the two cuts projected in September.
Before the Fed meeting, investor expectations grew for a clearer signal from the central bank regarding interest rate reductions in 2024, reflecting recent data indicating a persistent decline in US inflation. The increased forecast for interest rate cuts by the Fed aligned with investor hopes.
The post-meeting statement from the Fed also acknowledged a reduction in inflation over the past year and officially revised down its 2024 inflation forecast to 2.4%, down from the previous 2.6%.
Gina Bolvin, President of Bolvin Wealth Management Group, remarked to CNBC, “Today, the Fed gave the market an early Christmas gift as it finally made positive comments about inflation. It seems that the Fed is following the market rather than the market following the Fed. The Christmas season upward trend may continue,”
Dow Jones, which retreated from record levels in early 2022 due to the Fed’s initiation of a rate hike campaign, has now surged over 10% since the beginning of the fourth quarter of 2023, driven by growing expectations of the Fed’s shift toward easing.
This rally has propelled Dow Jones’s total gain from the start of the year to 11.9%, with the S&P 500 rising by 22.6% and the Nasdaq, dominated by technology stocks, witnessing a 40.8% increase.
Wednesday’s statistical data continued to reinforce the trend of diminishing inflation, with the Producer Price Index (PPI) for November remaining unchanged from October. The yield on the 10-year US Treasury bond fell to 4.03%, the lowest since August, following the Fed’s meeting results.
In the energy market, Brent crude oil futures in London increased by $1.02 per barrel, or 1.39%, closing at $74.26 per barrel.
WTI crude oil futures in New York rose by $0.86 per barrel, or 1.25%, ending at $69.47 per barrel.
Previously, during Tuesday’s session, both oil prices closed at their lowest levels since June 27 due to concerns of oversupply in 2024. However, this session witnessed a recovery, supported by optimism about interest rates and data indicating a significant reduction in US oil inventories.
The US Energy Information Administration’s weekly report revealed a 4.3 million-barrel decrease in crude oil inventories for the week ending December 8, surpassing the forecasted decrease of 700,000 barrels per day in a Reuters survey.
“The global economic concerns for next year, OPEC+’s weak commitment to production cuts, and rising oil production outside OPEC+, including record production in the US, will continue to exert downward pressure on oil prices until the end of this year,” commented senior analyst Craig Erlam of analysis and data company Oanda.
By. Pham Thanh Bien
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