Major United States benchmarks finished higher on Wednesday (Thursday AEDT) as Federal Reserve policymakers held rates steady and maintained their outlook for two interest rate cuts in 2025, easing investor concerns about economic uncertainty.
The Dow Jones Industrial Average rose 383.3 points, or 0.9%, to close at 41,964.6. The S&P 500 climbed 1.1% to end at 5,675.3, while the Nasdaq Composite advanced 1.4% to settle at 17,750.8.
As expected, the Fed kept its benchmark interest rate steady at a range of 4.25% to 4.5%.
However, policymakers reaffirmed their projection for two rate cuts later this year while acknowledging that “uncertainty around the economic outlook has increased”.
Market participants cheered the Fed’s continued expectation for monetary easing, as well as Powell’s assessment that the U.S. economy remains resilient.
The Fed’s decision comes amid heightened trade tensions between the U.S. and key partners. Earlier this month, President Donald Trump imposed new tariffs on imports from Canada, Mexico, and China.
Both Canada and China have retaliated with duties of their own. Trump’s temporary tariff exemptions for certain imports from Canada and Mexico are set to expire on April 2.
In bond markets, the 10-year Treasury yield fell 0.9% to 4.247%, while the 2-year yield declined 1.7% to 3.977%.
