Stocks ended higher Wednesday after the Federal Reserve kept interest rates steady and Chair Jerome Powell indicated that there is a possibility the central bank’s policy-setting committee may lower rates in the coming months.
Powell hinted at a news conference after the Fed announced the fed funds target rate was kept at the 2.25% to 2.5% range that the Federal Open Market Committee may cut rates this year. St. Louis Fed President James Bullard cast the only vote to cut rates while the panel’s previous rate decisions under Powell’s leadership had been unanimous.
In its statement, the FOMC noted “uncertainties” had increased. “In light of these uncertainties and muted inflation pressures, the committee will closely monitor the implications of incoming information for the economic outlook and will act as appropriate to sustain the expansion, with a strong labor market and inflation near its symmetric 2% objective.”
Health-care shares led advancing sectors, closing up nearly 1% Blue-chip UnitedHealth (UNH) gained 1.8% after the Federal Trade Commission approved its purchase of DaVita’s (DVA) primary and urgent-care unit. DaVita ended more than 3% higher
Adobe (ADBE) rose 5.2% as the software company’s second-quarter results smashed expectations, pushing tech shares up more than 0.4%. Autodesk (ADSK) added 2.3% while Western Digital (WDC) advanced 1.9%.
Consumer staples ended 0.4% higher as Lamb Weston Holdings (LW) jumped 4% and Kraft Heinz (KHC) rose 2.3%.
Dow (DOW) fell 2.2% to push materials down nearly 0.5%.
In corporate news, American Airlines Group (AAL) rose 2.1% after the world’s largest carrier ordered 50 of Airbus’s new long-haul A321XLR jetliner.
In economic news, mortgage applications edged lower last week but strong demand from first-time buyers coupled with low unemployment pushed the year’s purchase activity up on an annual basis, data from the Mortgage Bankers’ Association showed.
The Dow Jones Industrial Average ended about 0.2% higher while the Standard & Poor’s 500 added 0.3%. The Nasdaq Composite rose more than 0.4%.