U.S. stock indexes rise, yields drop

The Dow Jones Industrial Average gained 497.46 points, or 1.05%, to 48,057.75, the S&P 500 added 46.17 points, or 0.67%, to 6,886.68 and the Nasdaq Composite advanced 77.67 points, or 0.33%, to 23,654.16

U.S. stock indexes jumped while Treasury yields declined on Wednesday after the central bank cut interest rates as expected and investors remained hopeful about further cuts ahead, even as the bank signalled it will likely pause cuts for now.

The U.S. dollar was lower against major currencies.

The central bank cut rates by a quarter percentage point, and projections issued after its two-day meeting showed the median policymaker sees just one quarter-percentage-point cut in 2026, the same outlook as in September.

In his press conference after the announcement, central bank Chair Jerome Powell declined to provide guidance on whether another interest rate cut lies in the near future. However, he said the labour market has significant downside risks and the bank does not want its policy to push down on job creation.

Stocks rose while Treasury yields lost ground following Powell’s comments.

Today’s rate cut was music to both the bond market and the stock market’s ears, said Jake Dollarhide, CEO of Longbow Asset Management in Tulsa, Oklahoma.

The guidance for possibly one cut in 2026 is better than many dire predictions of no cuts in 2026, so there’s a lot of good news to parse through here for investors, he added.

Weakness in the job market seemed to be more of a concern at this point than sticky inflation, Dollarhide said, adding there were tremendous fears the bond vigilantes were going to hijack this bull market rally.