Fed cuts rate for the second time of the year in a widely expected move meant to sustain a decade-long economic expansion but gave mixed signals about what may happen next and announced that it would take down its benchmark overnight lending rate to a target range of 1.75% to 2%.
Stocks recover after Powell's remarks and erase most of their losses. All US major indices fight for gain and rise except Nasdaq fell a little bit. The Dow Jones industrial average rose 0.13%, while the S&P 500 index climbed 0.03% and swapping out a drop that at one point reached the biggest in four weeks. Among all the sectors Utility, technology and financials were the biggest gainers for the day. Banks were the best performer as the financial sector rallied higher than others and pull the maximum benefits from the rally. It is the second straight day that the New York Federal Reserve poured another $75 billion into the market into the financial system to bring them back down to keep markets functioning smoothly and calm stress in the overnight lending market.
JPMorgan Chase & Co were the best performers in Dow and Comerica Inc, SVB Financial Group were the best performers in S&P 500. In the technology sector Apple, Microsoft and KLA-Tencor Corporation were the best performers in these two indices. KLA-Tencor Corporation rose 3.53% all-time high among them. Yesterday's move was an "insurance" for wall street as well as investors. Consumer confidence continues to drive U.S. economic activity according to Powell which help keep the economy strong and as "insurance against ongoing risks."
After the release of the Fed’s monetary policy decision, Fed Chair Jerome Powell said in a press conference the Fed’s “temporary operations were effective in relieving funding pressures, and we expect the federal funds rate to move back into the target range.” and also remarked that turmoil in money markets this week carry “no implications for the economy or the stance of monetary policy."