Stock Market Today: Stocks higher following Fed rate decision, forecasts
Markets will key on the Fed's rate decision and new growth and inflation forecasts.
U.S. stocks edged cautiously higher Wednesday, while gold prices hit another all-time record, as investors braced for a crucial Federal Reserve rate decision, as well as commentary from Chairman Jerome Powell on the central bank's new economic forecasts, later in the session.
Updated at 2:13 PM EDT
Fed cuts ... but not the rate
The Federal Reserve held its benchmark lending rate steady Wednesday, while cutting its GDP growth forecast and boosting its outlook for near-term inflation amid concerns over Trump's tariff, immigration and budget-cutting policies.
The Federal Funds rate was left between 4.25% and 4.5%, following the central bank's last rate cut in December, a move that was fully-anticipated by analysts, and held to its broader forecast of two quarter point rate cuts between now and the end of the year.
However, the central bank also sharply lowered its 2025 GDP growth forecast, forecasting a 1.7% advance compared to December's estimate of 2.1%.
The Summary of Economic Projections, also known as the Dot Plots, also forecast core inflation accelerating to 2.8%, up from its prior estimate of 2.5%.
Stocks extended gains following the Fed statement, with the S&P 500 last marked 35 points higher on the session, and the Nasdaq last marked 144 points higher.
Benchmark 10-year Treasury note yields eased 3 basis points 4.296% while 2-year notes were pegged at 4.088% after the Fed said it would "slow the pace of decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from $25 billion to $5 billion."
As expected, the Federal Reserve kept its target interest rate unchanged at a 4.25%-to-4.50% range. In a statement, the Fed said: "Recent indicators suggest that economic activity has continued to expand at a solid pace." https://t.co/vyIyVNHCna— James Picerno (@jpicerno) March 19, 2025
Updated at 9:36 AM EDT
Green open
The S&P 500 was marked 21 points, or 0.38% higher in the opening minutes of trading, with the Nasdaq rising 107 points, or 0.61%.
The Dow gained 126 points while the mid-cap Russell 2000 nudged 3 points, or 0.13% higher heading into this afternoon's Fed rate decision.
“Investors are closely monitoring the potential impact that policy shifts on tariffs and government spending from the new administration might have on the financial markets," said Joseph Gaffoglio, president and CEO of Mutual of America Capital Management.
"In addition, volatility in the markets has been compounded by concern over stretched valuations in certain sectors, especially within the AI market, as well as the outsized influence and negative performance drag of the Magnificent 7 stocks on the overall S&P 500,” he added.
S&P 500 Opening Bell Heatmap (Mar. 19, 2025)$SPY +0.31%
