The stock market was mixed on Wednesday after the Federal Reserve announced that it would keep interest rates near zero until 2023 in a bid to help support the U.S. economic recovery from the coronavirus pandemic.
The Dow Jones Industrial Average finished up 0.2%, around 50 points, on Wednesday, while the S&P 500 fell 0.4% and the tech-heavy Nasdaq Composite lost 1.3%.
While the economic recovery has “progressed more quickly than generally expected” and the Fed raised its outlook for unemployment and GDP, overall activity still remains “well below” the level it was before the pandemic, Fed chairman Jerome Powell said in a press conference.
The Federal Open Market Committee said it “expects to maintain an accommodative stance of monetary policy” until inflation averages 2% over time.
Stocks also jumped after White House chief of staff Mark Meadows told reporters that he was optimistic about a coronavirus stimulus deal, while President Trump said that he would support a bigger relief package.
Gains were partially kept in check by the release of disappointing U.S. retail sales, which rose 0.6% last month—lower than the 1.1% expected and the 1.2% jump in July.
“The Fed confirmed what we all thought, rates at 0% are here to stay, probably for years,” says Ryan Detrick, chief market strategist for LPL Financial. “That wasn’t a surprise, but what was a pleasant surprise is how much they increased their full-year GDP decline, to down 3.7% from down 6.5% in June,” he adds. “A better economy and a dovish Fed, that is a nice combo.”
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Cloud-based data storage company Snowflake surged more than 115% in its public debut on the New York Stock Exchange, trading under the ticker symbol “SNOW.” The company originally priced its IPO at $120 per share, but began trading at a whopping $245 per share amid high investor demand on Wednesday. With a valuation of nearly $68 billion, based on its opening price, Snowflake is on track for the largest software IPO ever.
After rallying on recent announcements of deals with ESPN and Michael Jordan, shares of daily fantasy and sports betting company DraftKings rose another 6% on Wednesday after signing an exclusive partnership with the NFL’s New York Giants. Shares of Eastman Kodak, meanwhile, soared over 35% after an independent review found that the company didn’t break any laws related to its disclosure of a $765 million loan from the U.S. government to pivot to drug production.
The market has moved higher so far this week, on Tuesday posting its third straight day of gains in a row as technology stocks continued to rebound from last week’s selloff. The S&P 500 fell 2.5% last week, its worst one-week drop since late June, while the Nasdaq fell more than 4% for its worst week since March. Amid the wider tech selloff last week, the Nasdaq briefly entered correction territory on Tuesday, after falling 10% in just three days of trading.
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