Key points:

  • The Fed kept interest rates unchanged, which eased investor concerns.
  • The Dow Jones, S&P 500 and Nasdaq Composite indices rose.
  • The consumer goods sector was the growth leader, while the healthcare sector was the underdog.

On Wednesday, Wall Street’s main stock indices showed positive dynamics at the end of the trading session. The market’s rise was driven by the Federal Reserve’s announcement that it would maintain interest rates. The decision eased investor concerns and increased expectations that interest rates would be cut three times this year.

The Dow Jones Industrial Average rose 401.37 points, or 1.03%, to 39,512.13. The S&P 500 added 46.11 points (0.89%) to close at 5,224.62. The Nasdaq Composite was the biggest gainer, rising 202.62 points (1.25%) to 16,369.41.

Federal Reserve message

The Fed’s policy statement described inflation as remaining “elevated.” The body also raised its forecasts for economic growth and lowered its forecast for the unemployment rate compared with estimates provided in December.

Financial analysts said Wall Street was reassured by Powell’s comments on inflation and the labor market, as well as his signal that the Fed would slow the pace of its drawdown of its bond holdings. Interest rates were kept at 5.25–5.5%.

Consumer stocks lead the pack

Nine of the eleven major S&P sectors posted gains, five of which gained more than 1%. The leader was the consumer goods sector, which showed growth of 1.5%.

The healthcare sector was the underperformer, down 0.23%. BioNTech shares fell 4.4% after the company reported lower revenue and profit in 2023 due to a refocus on developing cancer drugs. Shares of COVID-19 vaccine maker Moderna lost 1.9% and Novavax fell 2.2%.

The biggest contributor to growth in the consumer discretionary sector was Amazon, whose shares rose 1.3%.

Tesla shares added 2.5% after announcing a price increase for Chinese-made Model Y cars by 5,000 yuan ($694.55) effective April 1.

The S&P 500 posted 81 52-week highs and one new low. The Nasdaq recorded 251 new highs and 101 new lows.