Traders Take US Fed Interest Rate Cut In Stride As Powell In Focus: Markets Wrap

(Bloomberg) -- Stocks hit fresh all-time highs, Treasuries rebounded and the dollar fell the most since August, with traders awaiting remarks from Jerome Powell after the Federal Reserve cut rates by a quarter percentage point to support the economy.

Equities extended their post-election rally, with the S&P 500 approaching the 6,000 milestone. Treasury 10-year yields declined eight basis points to 4.35%. The Bloomberg Dollar Spot Index fell 0.6%.

US policymakers no longer included a line in their statement about achieving “greater confidence” that inflation is moving sustainably toward 2%, though they noted inflation has “made progress” toward the central bank’s goal. The committee modified its language around the job market slightly as well. Powell will hold a press conference at 2:30 p.m. Washington time.

“While the statement was ‘blah,’ I do think Powell tries to leave the December meeting more 50/50 and does not commit either way which compares with the current pricing of a 70% chance,” said Peter Boockvar, author of The Boock Report.

The S&P 500 rose 0.6%. The Nasdaq 100 added 1.4%. The Dow Jones Industrial Average was little changed. A Bloomberg gauge of the “Magnificent Seven” megacaps climbed 2.2%. The Russell 2000 of small firms fell 0.2%.

Most major groups advanced, with Apple Inc. and Nvidia Corp. leading gains in megacaps. Lyft Inc. jumped 24% after the ride-hailing company gave a bullish outlook. A closely watched gauge of banks dropped 2% after gaining over 10% in the previous session. JPMorgan Chase & Co. slid 4% after an analyst downgrade.

The pound gained as traders pared bets on further Bank of England easing.