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The major market averages moved higher on Thursday, a day after major Wall Street indices notched fresh record highs as the Federal Reserve reaffirmed its forecast of three interest rate cuts this year, downplaying concerns over recent hot inflation reports.
Early on and the Dow (DJI) was +0.8%, the S&P 500 (SP500) was +0.6%, and the Nasdaq Composite (COMP:IND) was +0.6%.
Rates were little changed, with the 10-year Treasury yield (US10Y) was down 1 basis point to 4.26% and the 2-year yield (US2Y) was up 2 basis points to 4.62%.
The Federal Open Market Committee kept its policy rate unchanged at 5.25%-5.50% for the fifth straight time, with Chairman Jerome Powell noting that the risks of the Fed achieving its inflation and employment goals have moved into better balance.
"Last night saw a remarkably relaxed Fed as Powell indicated that January's higher inflation could have been seasonal, and February's print had already seen improvements," said Deutsche Bank's Jim Reid, adding that Powell's dovish-leaning press conference drove equities higher and yields lower.
"Our economists continue to expect the first rate cut to come in June with 100 bps of cuts in total this year, but with risks skewed to a more hawkish outcome," Reid added.
Fed officials lifted their growth and inflation forecasts, and dialed back the scope of cuts in 2025 and beyond, as they continue to wait for greater confidence on inflation before easing.
"The FOMC is still priced for a too-optimistic outcome regarding rate cuts in 2025," said Wells Fargo Investment Institute. "As the disinflation base effect wears off, we think it will prove difficult for inflation to move quickly toward the Fed's 2% inflation target."
On the economic front, initial jobless claims for the week ended March 16: came in at -2K to 210K versus the 212K consensus and 212K prior (revised from 209K) figures.
Also, U.S. existing home sales jumped 9.5% in February to 4.38M compared to the the 3.95M consensus level.