Jones Industrial Average closed down following the announcement of rate cuts by the Federal Reserve.
Dow Jones Industrial Average hits an all-time high after Fed announces rate cuts. (Photo: Dispatch Argus)
Rate Cuts Announcement By Federal Reserve
The Dow Jones Industrial Average, as mentioned by ABC News, closed at a record high above 37,000 after the Federal Reserve signaled rate cuts next year. This rate cuts announcement sent Wall Street into a powerful rally, with the Dow Jones jumping 512 points, or 1.4%, surpassing its previous peak.
The major indices also rose with the rate cuts announcement, including the S&P 500 and Nasdaq Composite. Lower interest rates are welcomed by Wall Street as rate cuts were announced as they can also relieve pressure on the economy and boost investment prices.
Investments seen as expensive or lower quality benefit the most from rate cuts. Big Tech stocks, like Apple, have been driving the S&P 500’s rally this year. The Federal Reserve held its main interest rate steady but expressed a willingness to cut rates soon.
Their projections indicate a median official expects the federal funds rate to be around 4.6% by 2024, implying less steep rate cuts than expected by traders. However, after the release of these projections, traders on Wall Street increased their bets for rate cuts in 2024.
Asia-Pacific Equity Markets
In a published article by CNBC, Asia-Pacific equity markets had a mixed close on Thursday as investors digested the US Federal Reserve’s decision to end its interest-rate-hiking cycle and signal rate cuts for the next year.
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