US open: Markets extend record highs after Fed meeting
By Benjamin Chiou
Date: Thursday 21 Mar 2024
(Sharecast News) - US equities opened strongly on Thursday as risk appetite continues to be boosted by reassuring comments from the Federal Reserve and an unexpected rate cut from across the Pond, with Wall Street benchmarks at record highs.
The Dow was up 0.9%, while the S&P 500 and Nasdaq rose 0.7%, with all three indices extending their fresh record highs reached on Wednesday after the Federal Open Market Committee meeting.
The Fed kept interest rates unchanged at 5.25-5.50%, but nudged its forecasts for economic growth higher for the next two years. While the central bank also predicted that inflation would fall slower than expected, Fed chair Jerome Powell said "the risks of achieving our inflation goals are coming into better balance".
The so-called FOMC 'dot plot' still suggests cuts of 75 basis points this year, unchanged from the last meeting despite a recent rise in both the consumer-price and producer-price indices.
"Given the recent uptick in both CPI and PPI, this was unexpectedly dovish. It also suggests that the Fed expects inflation to resume its downward trend, with the recent rise being temporary," said David Morrison, senior market analyst at Trade Nation.
Market sentiment was also bolstered by the Swiss National Bank, which made the surprise move on Thursday to cut interest rates, becoming the first central bank from a major developed economy to cut rates in the current cycle.
In terms of economic data, the S&P Global composite purchasing managers' index (PMI) slipped to 52.2 in March from 52.5 in February, after a rise in the manufacturing PMI was outweighed by a drop in the services PMI; meanwhile, existing-home sales jumped by 9.5% in February to 4.38m, well ahead of the 3.94m expected.
Reddit makes its debut
Trading in social media platform Reddit got under way on the NYSE on Thursday, in one of the most high-profile tech debuts of recent years. The social media platform sold around 22m shares at $34 a share, at the top of its $31 to $34 range, giving it a valuation of around $6.4bn.
Shares in iPhone maker Apple were firmly lower after the Department of Justice sued the tech group for allegedly violating antitrust laws and preventing customers from switching to its rivals.
Boeing was flying high after Korean Air put in an order for more than 30 aircraft for a total of $13.7bn, while Micron Technology jumped to a record high after beating second-quarter estimates and guiding to a strong third quarter.
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