NEW YORK (AP) — Stock prices on the New York Stock Exchange closed higher again Thursday, boosted by hopes that the Federal Reserve has finally decided that it no longer needs to raise interest rates.
The S&P 500 index rose 1.9%, posting its fourth consecutive day of gains. It’s already up 4.9% this week and is on track to have its best week in almost a year.
The Dow Jones Industrial Average gained 564 points, or 1.7%, and the Nasdaq Composite gained 1.8%.
Stock markets around the world advanced after the Federal Reserve opted not to raise its main interest rate on Wednesday night. It has already raised rates aggressively since last year, hoping to slow the economy and hit financial markets enough to keep inflation from spiking.
More importantly for financial markets, investors also interpreted Fed Chairman Jerome Powell’s comments to mean that recent increases in long-term Treasury yields were acting as substitutes for rate hikes and could obviate the need for the central bank to raise rates further.
Some reports on the US economy also showed some momentum that could help ease pressure on high inflation. Federal Reserve officials are waiting to gather enough such data before saying they are comfortable with the level of rates to bring inflation back to its 2% target.
Meanwhile, a preliminary report released Thursday said U.S. companies produced more over the summer than they increased the number of hours worked, indicating they became more efficient. Those types of productivity increases could ease pressure on inflation and contribute to economic growth.
Productivity appears poised to maintain an upward trend over the next two years, helped in part by the adoption of artificial intelligence technology, according to economists at Deutsche Bank.
The S&P 500 rose 79.92 points to finish at 4,317.78. The Dow gained 564.50 points, closing at 33,838.08, and the Nasdaq gained 232.72, settling at 13,294.19.
More swings are likely on Wall Street. The monthly update on the US employment market will be released on Friday morning. Economists predict a reduction in hiring in October.
AP writers Yuri Kageyama and Matt Ott contributed to this report.
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2023-11-02 22:46:26
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