Following the Federal Reserve's statement on Wednesday, which maintained interest rates at current levels while predicting up to three rate cuts in 2024, Wall Street indices saw a notable uptick, setting new records. The market had already priced in the decision, even if the most recent inflation data exceeded expectations.
Fed Chair Jerome Powell addressed the ongoing problem of high inflation at a news conference, but he also pointed out that the Fed's overarching outlook—which calls for a steady decline in inflation towards a two percent target—has not been materially affected by the current year's inflation measurements.
Investors were relieved by the Federal Reserve's steady prediction of rate cuts, according to analyst Patrick O'Hare of Briefing.com. Powell's upbeat comments about the health of the economy also helped to boost market mood.
The technology-heavy Nasdaq led the charge as the Dow Jones, S&P 500, and Nasdaq all reached previously unheard-of closing heights amid these events. In the meantime, the value of the US dollar fell relative to other strong currencies like the pound and the euro.
European markets, on the other hand, gave a mixed image. London and Frankfurt had little change, while Paris experienced a slump following the issuance of a profit warning by Kering, the owner of the luxury brand Gucci, on account of dwindling demand in China. Fears that other luxury firms might face similar difficulties as a result of this announcement caused Kering's shares to plunge by 12 percent, the most in a single day.
