Stock Market Today: Dow Closes at New High After Fed Signals Rate Cuts
The central bank left rates unchanged at its December meeting, but hinted that several cuts are coming in 2024.
Stocks traded in a tight range in the lead up to this afternoon's policy announcement from the Federal Reserve as investors took in another mixed inflation reading. However, the main indexes took a decisive turn higher after the central bank, as expected, kept interest rates unchanged in its December meeting and gave an update on the number of rate cuts it expects in 2024.
Ahead of the mid-afternoon Fed news, data from the Bureau of Labor Statistics showed the November Producer Price Index (PPI), which measures what businesses are charging suppliers for goods, was unchanged on a month-to-month basis, and up 0.9% on an annual basis. The monthly figure was higher than the 0.4% decline seen in October, while the yearly number was slower than the 1.2% rise from the previous month.
Core PPI, which excludes volatile food and energy prices, matched October's 0.1% increase. Year-over-year, core PPI was up 2.5%, below what was seen the month prior.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Fed keeps rates unchanged, but hints cuts are to come
Today's mixed inflation data echoes what was seen in Tuesday's Consumer Price Index (CPI) report for November. In today's press conference, Fed Chair Jerome Powell acknowledged that the recent improvement we've seen on inflation "is very good news." However, Powell admitted it remains above the central bank's 2% target and that "we need to see more progress."
Still, according to the Fed's Summary of Economic Projections (SEP), or the "dot plot," which summarizes what each member expects monetary policy to be going forward, most central bankers anticipate three quarter-point rate cuts in 2024.
"The stock market waited all year for the Federal Reserve to pivot and for Christmas it gave the market the present of a pivot," says Anthony Denier, CEO of Webull, a commission-free trading platform. By keeping the federal funds rates unchanged and forecasting cuts for next year, "the Fed took a step toward the market, rather than the market moving toward the Fed."
Pfizer spirals after giving gloomy 2024 guidance
In single-stock news, Tesla (TSLA) was down 3.7% at its intraday low after the electric vehicle maker said it is recalling 2 million cars over Autosteer control issues with its Autopilot advanced driver-assistance system. "There may be an increased risk of a collision" in circumstances where a driver is misusing features related to Autosteer, said the recall notice issued by the National Highway Traffic Safety Administration. Thanks to the afternoon Fed surge, though, TSLA stock ended the day up 1.0%
Elsewhere, Pfizer (PFE) plunged 6.7% after the pharmaceutical giant said it expects fiscal 2024 revenue to range between $58.5 billion and $61.5 billion. Earnings per share are forecast to land between $2.05 and $2.25. By comparison, analysts, on average, anticipate full-year earnings of $2.93 per share on $58.6 billion in sales. The blue chip stock closed today at $26.66 – its lowest level since October 2014.
As for the main indexes, the Dow Jones Industrial Average rose 1.4% to 37,090 – a new all-time closing high – the S&P 500 gained 1.4% to 4,707, and the Nasdaq Composite climbed 1.4% to 14,733.
Related content
- Amazon Pilot Tests A New Grocery Delivery Plan
- The Earnings Recession Is Over
- Kiplinger's Earnings Calendar for This Week
-
Stocks Struggle for Gains to Start 2026: Stock Market TodayIt's not quite the end of the world as we know it, but Warren Buffett is no longer the CEO of Berkshire Hathaway.
-
Tip: Ways to Track Your Credit Card RewardsHere are the best strategies and apps to help you stay current with your credit card rewards.
-
How New Investors Can Pick Their Perfect Portfolio, According to a ProSee what Cullen Roche has to say about finding your perfect portfolio as a new investor and his two-word answer on where he thinks the stock market is headed in 2026.
-
Stocks Struggle for Gains to Start 2026: Stock Market Today
It's not quite the end of the world as we know it, but Warren Buffett is no longer the CEO of Berkshire Hathaway.
-
If You'd Put $1,000 Into Lowe's Stock 20 Years Ago, Here's What You'd Have TodayLowe's stock has delivered disappointing returns recently, but it's been a great holding for truly patient investors.
-
Stocks End Volatile Year on a Down Note: Stock Market TodayAfter nearing bear-market territory in the spring, the main market indexes closed out the year with impressive gains.
-
Stocks Extend Losing Streak After Fed Minutes: Stock Market TodayThe Santa Claus Rally is officially at risk after the S&P 500's third straight loss.
-
If You'd Put $1,000 Into 3M Stock 20 Years Ago, Here's What You'd Have TodayMMM stock has been a pit of despair for truly long-term shareholders.
-
Santa Claus Rally at Risk as Tech Stocks Slump: Stock Market TodayThe Nasdaq Composite and Dow Jones Industrial Average led today's declines as investors took profits on high-flying tech stocks.
-
Gold and Silver Shine as Stocks Chop: Stock Market TodayStocks struggled in Friday's low-volume session, but the losses weren't enough to put the Santa Claus Rally at risk.
-
The Santa Claus Rally Officially Begins: Stock Market TodayThe Santa Claus Rally is officially on as of Wednesday's closing bell, and initial returns are positive.
