Wall Street gains modestly after Fed signals rates to hold steady

Wall Street’s benchmark S&P 500 stock index slightly extended modest gains after the US Federal Reserve held interest rates steady and signalled that borrowing costs are likely to remain unchanged indefinitely.

The US central bank said moderate economic growth and low unemployment are expected to continue through next year’s presidential election.

With the Fed modestly optimistic, the US sharemarket showed some modest gains.
With the Fed modestly optimistic, the US sharemarket showed some modest gains.Credit:Michael Nagle

After cutting rates three times earlier this year, the Fed left its benchmark rate at the target range of between 1.50 per cent and 1.75 per cent, a decision that was widely expected.

“You are looking at a cautiously optimistic Fed,” said Karl Schamotta, chief market strategist at Cambridge Global Payments in Toronto.


“The tone that you see through the statement and projections suggest that they believe that they have taken out enough insurance to prevent a downturn.”

With the Fed expected to stand pat on rates, investors have been more focused on US-China trade relations, including new tariffs on Chinese goods that could go into effect on December 15.

The Dow Jones Industrial Average rose 5.65 points, or 0.02 per cent, to 27,887.37, the S&P 500 gained 7.43 points, or 0.24 per cent, to 3,139.95 and the Nasdaq Composite added 30.05 points, or 0.3 per cent, to 8,646.23.

Most S&P 500 sectors were higher, with materials and technology leading the way.

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Source: Thanks smh.com