Wall Street touches new record

US stocks close higher as investors welcome hints from the US Federal Reserve that the recent lift in inflation will not push rate rises forward.

US stocks have closed higher as investors welcomed hints from the US Federal Reserve that a recent lift in inflation will not push rate rises forward.

At the closing bell, the Dow Jones Industrial Average jumped 98.13 points, or 0.58%, to 16,906.62, within 50 points of its record closing high.

The broad-based S&P 500 added 15 points, or 0.77%, to 1,956.99, a new closing peak. The finishing level for the index was just above the 1951.27 record reached on June 9.

Meanwhile, the tech-heavy Nasdaq Composite Index gained 25.60 points, or 0.59%, to 4,362.84.

Stocks were trading slightly lower for much of the day before the Fed announcement at 4am (AEST) pushed stocks sharply higher.

As expected, the Fed again tapered the rate of its monthly asset purchases by $US10 billion while leaving rates on hold at record lows.

Investors were worried that signs of increased consumer prices and an improving labour market would drive the Fed to a more bullish tone, with perhaps an indication the timeline for rate hikes could be pushed forward.

However, the Fed's rhetoric was scarcely altered from its last meeting statement, with no sign yet that rates will move anytime before the middle of 2015.

The central bank also announced it had revised its forecast for US growth lower, while also cutting its unemployment rate projections.

InvestSMART FORUM: Come and meet the team

We're loading up the van and going on tour from April to June, with events on the NSW central & north coast, the QLD mid-north coast and in Perth, Adelaide, Melbourne, Sydney and Canberra. Come and meet the team and take home simple strategies that you can use to build an investment portfolio to weather any storm. Book your spot here.

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles