Investing.com – The Dow soared Wednesday after Federal Reserve Chairman Jerome Powell said interest rates were close to neutral, easing fears that ongoing rate hikes will trigger an economic slowdown.
The Dow Jones Industrial Average rose 2.50%. The S&P 500 rose 2.34%, while the Nasdaq Composite rose 2.95%.
For months, market participants have feared that the Fed may overshoot on policy tightening, choking economic growth. But Powell allayed those fears, saying interest rates were “just below” neutral.
“Interest rates are still low by historical standards, and they remain just below the broad range of estimates of the level that would be neutral for the economy ‑‑ that is, neither speeding up nor slowing down growth,” Powell said.
Market participants will look to the Federal Reserve’s minutes from its November meeting slated for Thursday for further evidence on whether the Fed has pivoted to a more dovish stance on policy.
Beyond monetary policy, stocks were also supported by techs, led by a surge in shares of cloud companies including Salesforce.
Salesforce.com (NYSE:CRM) soared 10% after it smashed Wall Street estimates on both the top and bottom lines.
Cloud software company Nutanix (NASDAQ:NTNX) reported a narrower loss for the fiscal first-quarter than analysts had expected, sending its share price 5% higher.
Energy, meanwhile, shrugged off a drop in oil prices, which had followed a bearish petroleum report from the Energy Information Administration showing a larger-than-expected build in crude inventories.
On the economic front, a penultimate estimate of third-quarter GDP fell short of estimates, while woes in the housing market continued as new home sales undershot economists’ forecasts.
The strong rally in the broader market, however, helped homebuilders shrug off the downbeat housing data.
KB Home (NYSE:KBH), Lennar Corporation (NYSE:LEN) and DR Horton (NYSE:DHI) ended the day more than 1% up.
On the corporate news front, Nvidia (NASDAQ:NVDA) rose 4% after Mizuho analyst Vijay Rakesh said GPU pricing was starting to pick up from the September lows as excess inventories were shrinking.
Top S&P 500 Gainers and Losers Today:
Salesforce.com (NYSE:CRM), Adobe Systems (NASDAQ:ADBE) and Abiomed (NASDAQ:ABMD) were among the top S&P 500 gainers for the session.
Tiffany & Co (NYSE:TIF), JM Smucker (NYSE:SJM) and CME Group (NASDAQ:CME) were among the worst S&P 500 performers of the session.