US: Pleased by Fed, Dow, S&P 500 close at records

[NEW YORK] The Federal Reserve's improved economic outlook and willingness to maintain low rates put wind in the sails of major US stock indices on Wednesday, with the Dow and S&P 500 closing at records.

The benchmark Dow Jones Industrial Average gained 0.6 per cent to finish at 33,015.37, its first-ever close above the 33,000-point mark.

The broad-based S&P 500 also posted a record after gaining 0.3 per cent to end at 3,974.12, while the tech-rich Nasdaq Composite Index climbed 0.4 per cent to 13,525.20.

Traders concerned about inflation and a potential end to the Fed's easy money policies had pushed bond yields up and tech stocks down in recent sessions, causing the Nasdaq to struggle even while the Dow managed to gain.

But indices went solidly into the black after the Federal Reserve on Wednesday afternoon raised its US economic growth forecast for this year by more than two points to 6.5 per cent, while central bank chair Jerome Powell made clear the bank does not see a price spiral looming.

"The most important thing is that he is saying that the Fed is not going to act preemptively to avoid inflation," Gregori Volokhine of Meeschaert Financial Services said.

Disney finished 0.5 per cent higher after announcing it was aiming to reopen Disneyland in California at limited capacity in late April.

AFP