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.

US Federal Reserve Chair Jerome Powell speaking at podium with american flags and fed seal in the background
(Image credit: BRENDAN SMIALOWSKI/AFP via Getty Images)

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.

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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.

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Karee Venema
Senior Investing Editor,

With over a decade of experience writing about the stock market, Karee Venema is the senior investing editor at She joined the publication in April 2021 after 10 years of working as an investing writer and columnist at Schaeffer's Investment Research. In her previous role, Karee focused primarily on options trading, as well as technical, fundamental and sentiment analysis.