Federal Reserve Board Chair Jerome Powell speaks at the Economic Club of New York lunch event at the Sheraton New York Times Square Hotel in New York City on November 28, 2018. U.S. markets surged Wednesday after the Fed announced it would leave rates unchanged. File Photo by John Angelillo/UPI | License Photo
Jan. 30 (UPI) -- The three major U.S. markets surged on Wednesday after the Federal Reserve left its interest rate unchanged.
The Dow Jones Industrial Average rose 434.90 points, or 1.77 percent, at the end of trading on Wednesday, while the S&P 500 rose 1.48 percent and the Nasdaq Composite rose 2.2 percent after the positive outlook from the Fed.
After raising the interest rate one-quarter point in December and suggesting two increases were likely incoming in 2019, the Fed announced it would maintain the target range for the federal funds rate at 2.25 percent to 2.5 percent.
"The Committee continues to view sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee's symmetric 2 percent objective as the most likely outcomes," the statement said. "In light of global economic and financial developments and muted inflation pressures, the Committee will be patient as it determines what future adjustments to the target range for the federal funds rate may be appropriate to support these outcomes."
Fed Chairman Jerome Powell said the case for increasing interest rates "has weakened" and that he would "need to see a need for further rate hikes," CNBC reported.
The balance sheet, another concern for investors, was addressed in a separate statement in which the Fed said it "is prepared to adjust any of the details for completing balance sheet normalization in light of economic and financial developments."
Positive reports from some major stocks also had an uplifting effect on the market Wednesday as shares of Boeing rose 6.25 percent and Apple shares increased 6.8 percent after reporting quarterly earnings above expectations.