US: Dow surges 1.4% to record as Fed signals 2024 rate cuts

THE Dow Jones Industrial Average surged 1.4 per cent on Wednesday to finish above 37,000 points for the first time, after the Federal Reserve signaled it expects interest rate cuts in 2024.

The blue-chip index piled on more than 500 points to end at 37,090.24 after the Fed kept interest rates unchanged and projected an expected three interest rate cuts next year.

The broad-based S&P 500 also climbed 1.4 per cent to 4,707.09, along with the tech-rich Nasdaq Composite Index, which finished at 14,733.96.

The Fed kept its key lending rate between 5.25 per cent and 5.50 per cent, maintaining a 22-year high for the third straight meeting due to inflation.

But Fed Chair Jerome Powell acknowledged that the central bank believed “we are likely at or near the peak rate for this cycle.”

Powell added that policymakers had discussed when it would be “appropriate” for the Fed to begin cutting interest rates, while refusing to rule out another hike if the situation unexpectedly deteriorates.

“There was no surprise. Basically it was dovish,” said Peter Cardillo of Spartan Capital. “This is sweet for the stock market.”

Among individual companies, Pfizer fell 6.7 per cent after issuing a disappointing 2024 forecast that includes lower revenues connected to Covid-19 products.

Tesla rose 1.0 per cent despite initiating a recall of over two million vehicles in the United States due to risks associated with the autopilot software.

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Some analysts characterised the Tesla news as a non-event, noting that fixes could be addressed by an “over-the-air software remedy,” typically performed remotely and not involving a trip to a repair shop. AFP