2023-12-13 23:31:41
The Dow Jones New York Stock Exchange index closed higher on Wednesday (Dec. 13), with the Dow closing above 37,000 points for the first time since January. 2022, while the S&P500 and Nasdaq indexes both rose more than 1% after the Federal Reserve (Fed) decided to maintain interest rates as expected. and signaled an interest rate cut 3 times next year.
The Industrial Average Index closed at 37,090.24 points, an increase of 512.30 points or +1.40%, the S&P 500 Index closed at 4,707.09 points, an increase of 63.39 points or +1.37%, and the Nasdaq Index closed at 14,733.96 points, an increase of 200.57 points or +1.38%.
All three major indexes rose strongly. After the Monetary Policy Committee (FOMC) of the Federal Reserve (Fed) unanimously resolved to maintain short-term interest rates at 5.25-5.50% at its meeting yesterday. which is as expected by the market.
In forecasting the policy interest rate (Dot Plot), Fed officials signaled interest rate cuts at least 3 times in 2024, with each cut 0.25% for a total of 0.75%, from the previous signal of only 2 interest rate cuts in 2024. September meeting Along with sending a signal to reduce interest rates 4 more times in 2025, reducing by 0.25% each time, for a total of 1.00%.
In 2026, Fed officials signaled another 3 interest rate cuts, 0.25% each, for a total of 0.75%, which would result in the Fed interest rate falling to the range of 2.00-2.25%, which is close to the long-term interest rate trend at 2.50. %
Meanwhile, the Fed has lowered its US inflation forecast to 3.2% in 2023 from 3.7% and expects it to be at 2.4%, 2.2% and 2.0% in 2024, 2025 and 2026, respectively.
The market also received support from Fed Chairman Jerome Powell’s remarks during a press conference that “The Fed may not raise interest rates again. And the Fed is committed not to make this mistake by holding interest rates high for too long.”
Analysts from Bolvin Wealth Management Group said: “Investors welcome the Fed’s clear signal that it will start cutting interest rates next year. The outcome of this Fed meeting was like an early holiday gift to the market. And for the first time, the Fed is optimistic that US inflation will slow down. This makes us expect that the “Santa Claus Rally” situation will continue to occur.”
All 11 sectors in the S&P 500 index closed in positive territory, led by the real estate and utilities indexes, which rose more than 3%, while the Russell 2000 Index, an index of low-capitalization companies, rose 3.5%.
Pfizer shares, however, fell 6.7% after the company released 2024 profit and revenue forecasts that fell below analysts’ estimates. This is due to a slowdown in demand for drugs and vaccines related to COVID-19.
For the economic data that was reported last night. The US Department of Labor revealed that The Headline Producer Price Index (Headline PPI), which includes food and energy categories, rose 0.9% in November year-on-year. Lower than analysts’ expectations of 1.0% from 1.2% in October.
The Core PPI index, which does not include food and energy categories, increased 2.0% in November year-on-year. Lower than analysts’ expectations of 2.2% from 2.3% in October.
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