Fed Rate Decision Gives Stock Market a Boost
On Wednesday, the Federal Reserve confirmed that two more interest rate cuts are confirmed for this year, and the stock market reacted by climbing quickly.
No rate changes were made by the Federal Reserve on Wednesday, but with two more coming this year, the stock market is finally able to get out of its slump. The Nasdaq Composite rose by 1.41%, regaining much of the lost ground from the day before. The Dow Jones climbed 0.92%, and the S&P 500 added 1.08%.
Most of the major stocks jumped as well, and we saw price increases from Tesla (TSLA), Apple (AAPL), MicroStrategy (MSTR), and Microsoft (MSFT) before trading closed on Wednesday. We could see these stocks continue to rise through the week on the Fed rate news.
This has been a trying period for the stock market, with the last few weeks mostly filled by a downward trend. The new tariff policies that President Donald Trump has enacted have made investors worry and economists start to talk about recession.
Why The Fed News Made the Stock Market Climb
The Federal Reserve decided not to make any changes to the current interest rate right now, so why did the stock market go bullish anyway? This move was entirely expected, and there was worry earlier this week that there would be no positive news out of the meeting. That was really had the markets low on Monday and Tuesday, as economists expected no rate changes to be made.
What they did not expect was that the Fed would issue some good news in the form of confirming two more rate cuts this year. Both of those cuts are expected to boost the stock market, and that is promising for investors right now who have something to look forward to. It was excellent form for the Federal Reserve to discuss those future cuts, which we anticipate to be in line with cuts issued in late 2024. They should have a similar positive impact on the stock market as they did late last year.
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