The three major averages rallied to hit all-time closing records Wednesday after the Federal Reserve held rates at a 23-year high and maintained expectations for three cuts before the end of 2024.
The Dow Jones Industrial Average rallied 401.37 points, or 1.03%, to finish at 39,512.13, while the S&P 500 gained 0.89% to close at 5,224.62 and punched above the 5,200 level for the first time ever. The Nasdaq Composite jumped 1.25% to settle at 16,369.41.
The Fed left rates unchanged but said that it plans to cut three times before the end of the year, reaffirming its previous forecast from December. That said, the central bank indicated that it needs greater evidence that inflation is easing before it starts taking its foot off the brakes.
"The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent," the central bank said.
Prior to the meeting, some investors had feared that a recent spate of hot inflation reports would potentially result in even fewer cuts than markets anticipated.
"We had some inflation bumps this year but Jerome Powell's not blinking," said David Russell, global head of market strategy at TradeStation. "Investors are relieved to see three cuts stay in the dot plot, supporting markets and risk appetite. The Fed might wake up with a hangover, but the punchbowl isn't going away yet."
Financial stocks were higher after the Fed decision on the hope that rate cuts this year will keep the economy growing. American Express added 2.8%, while the SPDR S&P Regional Banking ETF gained more than 3%.
Megacap technology stocks responsible for powering the recent market rally rose as investors bet the sector stands to gain the most from lower rates. Alphabet, Amazon, Microsoft and Nvidia rose about 1%, while Meta Platforms gained 1.9%. Recent market laggards Apple and Tesla advanced 1.5% and 2.5%, respectively.
Chipotle Mexican Grill advanced 3.5% after declaring a stock split postmarket Tuesday. Paramount Global skyrocketed 11.8% following a report that Apollo Global Management offered $11 billion for its film and TV studio.
Stocks surged on Wednesday and all the major averages hit all-time closing highs after the Federal Reserve held rates steady and kept plans to cut three times before the end of the year intact.
The Dow Jones Industrial Average rallied 401.37 points, or 1.03%, to finish at 39,512.13. The S&P 500 gained 0.89% to close at 5,224.62, punching above the 5,200 level for the first time ever. The Nasdaq Composite jumped 1.25% to settle at 16,369.41.
— Samantha Subin
Here are some of the stocks breaking all-time highs during Wednesday's session:
— Samantha Subin
Actively managed mutual funds and exchange-traded funds fell short of passive funds in 2023, but within the bond category, active management stood out, according to Morningstar.
Some 53% of active bond managers survived and beat the passive average in 2023, up from 30% in 2022, the research firm said in a recent report. Active intermediate core bond managers had the highest success rate at 57%, up from 38% the year prior, Morningstar found.
Active managers in intermediate core bond funds tend to take more credit risk through the corporate bond market or mortgage-backed securities compared to indexed funds. That's what helped them outperform last year, said Paul Olmsted, senior manager research analyst at Morningstar.
"You had not only, in 2023, a higher income component of active management versus the index, you also had credit spreads tighten," he said.
To see the top performing active bond funds right now, read the CNBC Pro story here.
— Michelle Fox
Stocks rallied this afternoon after the Federal Reserve announced it would keep rates steady in March but the Fed's dot plot revealed plans for three rate cuts in 2024.
"The immediate market reaction is the relief we were expecting. Investors were worrying the Fed was going to pull back from rate cuts this year, so keeping three rate cuts on the table naturally pushes stocks higher and bonds yields lower," said Bryce Doty, a portfolio manager at Sit Investment Associates.
Doty added that it's a positive sign for investors to see that the Fed understands that it can still cut rates without compromising its tough stance on ifnlation.
— Lisa Kailai Han
Shares of Paramount Global rose more than 9% after a report from the Wall Street Journal that Apollo Global Management had offered $11 billion for the entertainment company's film and TV studio.
The reported offer, which the Journal attributed to people familiar with the situation, is more than the market cap for Paramount as a whole.
Paramount declined to comment to CNBC on the story.
— Jesse Pound
Technology and small-cap stocks notably outperformed in afternoon trading as traders responded to the latest updates from the Federal Reserve.
The small-cap focused Russell 2000 climbed 1.5% shortly after 3 p.m. ET, while the technology-heavy Nasdaq Composite added around 1%. By comparison, the broad S&P 500 and blue-chip Dow rose just about 0.7% and 0.8%, respectively.
— Alex Harring
Consumer discretionary and communication services stocks rallied on the back of the Federal Reserve's decision to hold rates steady, boosting their respective S&P 500 sectors 1.3% and 1%, respectively.
Ford Motor and Carnival were the biggest gainers within the consumer discretionary sector, jumping about 4% each. Chipotle Mexican Grill, Royal Caribbean and Etsy added at least 3%. Tesla added 2%, while Amazon inched up more than 1%.
Within communications services, Paramount Global rallied 8%. Warner Bros. Discovery and Take-Two Interactive each added 2%, while Meta Platforms gained 1.8%. Alphabet and Netflix edged up about 1% each.
— Samantha Subin
The market may be getting closer to seeing the Federal Reserve's first interest rate cut, but it doesn't feel that way, according to Greg McBride, chief financial analyst at Bankrate.
Although the central bank said Wednesday that it still sees rate cuts as a possibility this year, it isn't confident enough yet that inflation is on track for its 2% target, McBride said.
"The Fed statement was largely a 'copy and paste' from January, reflecting the fact that after two disappointing months of inflation data, the Fed is no closer to having the necessary conviction that inflation is on a consistent journey to 2%," he said, adding, "Interest rates took the elevator going up but will take the stairs coming down."
— Tanaya Macheel
The Fed kept interest rates unchanged, as expected. The central bank's so-called dot plot also showed the central bank still sees three rate cuts taking place in 2024.
— Fred Imbert
Here are the stocks making the biggest moves during midday trading:
Read the full list of stocks on the move here.
— Tanaya Macheel
Chipotle announced Tuesday that its board approved a 50-to-1 stock split. While it's largely a cosmetic move to make shares appear more affordable, stock splits have historically prompted outperformance.
CNBC Pro subscribers can click here to see what history shows the stock could be in for.
— Alex Harring
Astera Labs soared in its first session as a publicly traded company.
The artificial intelligence and cloud infrastructure stock surged more than 50% in midday trading on Wednesday, its first as a listed company on the Nasdaq. Astera announced Tuesday it would price its initial public offering at $36 per share.
— Alex Harring
TastyLive CEO Tom Sosnoff said Wednesday that Reddit will be a unique stock when it goes public this week.
"I think Reddit's going to be a really interesting play because it's going to be, for most investors, the only tradable pure social media app," Sosnoff told CNBC's "Squawk Box."
Sosnoff is already an investor in Reddit, having purchased equity in the company through a private sale last year.
Watch Sosnoff's full interview here.
— Jesse Pound
Boeing was the top performer in the Dow Jones Industrial Average on Wednesday, gaining more than 2% amid a flurry of news around the beleaguered airline operator.
Bloomberg, citing sources familiar, reported Boeing is exploring a possible sale of at least two of its defense businesses. Reuters, citing unnamed sources, said Boeing is exploring how Spirit AeroSystems can cut or reduce ties with Airbus.
Elsewhere, Boeing on Wednesday said it expects to burn more cash in the first quarter than previously anticipated, while also limiting 737 production to improve quality.
Boeing shares are down nearly 29% this year.
— Sarah Min
Energy and healthcare stocks lagged during early morning trading, dragging down their respective S&P 500 sector by about 0.4%.
Halliburton and Hess Corp were the worst performers in the energy sector, slipping more than 1% each. Diamondback Energy and Chevron also declined about 1% each.
Within the health care sector, Insulet and Moderna dropped more than 3% each. AbbVie, Regeneron and Dexcom edged down at least 1% each.
— Samantha Subin
Signet Jewelers shed 11.7% during Wednesday's session and headed for its worst day since September 2022.
The decline in shares came after the jewelry retailer offered first-quarter revenue guidance that fell short of Wall Street estimates. Signet said it expects revenues to range between $1.47 billion and $1.53 billion, versus a FactSet estimate of $1.61 billion.
The stock is down 15% year to date.
— Samantha Subin
Chipotle shares rose more than 7% on Wednesday, hitting a record above $3,000. The move higher comes after the fast casual chain approved a 50-to-1 stock split.
"Even though the stock split theoretically does not change the underlying economic value of CMG, we view this announcement as a positive for the shares in the sense that the move should aid trading liquidity and ultimately broaden the investor audience," Baird analyst David Tarantino wrote Wednesday.
— Fred Imbert
This liquid cooling stock and derivative play on Nvidia has surged nearly 500% over the last year.
One bull case, in particular, estimates that shares could nearly double from here, viewing the company as a unique way to play data center growth.
Read more on the stock poised to benefit from Nvidia's liquid cooling aspirations here.
— Samantha Subin
The S&P 500 opened flat on Wednesday, while the Dow Jones Industrial Average dipped 0.2%, or about 80 points. The Nasdaq Composite inched up 0.2%.
— Samantha Subin
Check out some of the companies making headlines in premarket trading.
Read the full list here.
— Brian Evans