Dow closes nearly 400 points higher after Fed says two rate cuts are still in the cards for 2025: Live updates

Dow closes nearly 400 points higher after Fed says two rate cuts are still in the cards for 2025: Live updates

  • 19.03.2025 23:04
  • nbcnewyork.com
  • Keywords: danger, success

Dow closes nearly 400 points higher after Fed signals two rate cuts in 2025, with S&P and Nasdaq also rising. Stocks rallied as investors liked the outlook for rate cuts and Powell's positive economic assessment.

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Estimated market influence

Dow Jones Industrial Average

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Analyst rating: N/A

The Dow Jones Industrial Average climbed 383.32 points, or 0.92%, and closed at 41,964.63.

S&P 500

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Analyst rating: N/A

The S&P 500 jumped 1.08% to end at 5,675.29

Context

Business Insights and Market Implications Analysis

Key Market Performance

  • Dow Jones Industrial Average: Climbed 383.32 points (0.92%) to close at 41,964.63.
  • S&P 500: Jumped 1.08% to end at 5,675.29.
  • Nasdaq Composite: Advanced 1.41% to settle at 17,750.79.

Federal Reserve Decision

  • Kept federal funds rate unchanged in the range of 4.25% to 4.5%.
  • Projected two rate cuts in 2025, signaling a more accommodative monetary policy.
  • Fed Chair Jerome Powell highlighted a "strong overall" economy but noted elevated inflation and consumer spending weakness.

Sector Performance

  • Financials: Up 1.3%.
  • Industrials: Rose 1.5%.
  • Energy: Gained 1.9%.
  • Consumer Staples: Showing relative strength, breaking out of a two-year downtrend.

Industry and Company Insights

  • Venture Global (LNG): Shares rose nearly 2% after DOE approved its CP2 LNG terminal.
  • Boeing: Shares jumped 6% following positive comments from CFO Brian West on cash burn reduction and factory improvements.
  • Nvidia (AI Chips): UBS expects a rebound in AI chip stocks, with Nvidia shares down over 17% YTD but seen as undervalued due to structural demand for AI compute power.

Market Trends and Risks

  • Stagflation Concerns: LPL economist Jeffrey Roach warned of growing stagflation risks, citing weak growth prospects and sticky inflation.
  • Bitcoin: Price rose over 2%, reaching $84,000, but expected to remain rangebound near key resistance levels ($85k-$95k).
  • Small-Cap Stocks: Outperformed, with the Russell 2000 Index up 1.7%.

Geopolitical and Trade Impact

  • U.S.-China trade tensions: Trump's tariffs on China, Canada, and Mexico may impact inflation short-term but are expected to dissipate.
  • Turkish Stock ETF: Plunged 11.4% after arrest of President Erdogan's rival.

Analyst and Strategist Views

  • UBS: Added Nvidia to its "Global Top List," highlighting structural demand for AI compute power despite near-term volatility.
  • Wells Fargo: Warned of negative returns on Fed decision days since 2024, with small-caps and value stocks underperforming.
  • Barclays: Fed and market need clarity on trade policies to reduce uncertainty.

Company-Specific News

  • Williams-Sonoma: Shares fell 11% after issuing tepid guidance and disclosing an accounting error.
  • Roku (Streaming): Guggenheim maintained buy rating, expecting improved engagement and economics in 2025.
  • Morgan Stanley: Reportedly planning to cut ~2,000 workers.

Long-Term Effects and Risks

  • Fed's cautious stance may lead to prolonged volatility in markets, with investors shifting focus to defensive sectors like consumer staples.
  • Tariffs and trade tensions could impact global economic growth and inflation dynamics.