The New York Stock Exchange ended in a spread order on Wednesday after a volatile day with the Nasdaq setting a new record high, while the S&P 500 is close to its own. The Fed reaffirmed its intention to continue its long-term support in the evening and was more hopeful about a rebound in 2021, considering a few tough months ahead of the coronavirus vaccination campaign. Markets are also in hopes that an agreement on a new $900 billion funding package to resolve the coronavirus pandemic will be immediately announced by U.S. Congress.
The Dow Jones index finally gave up -0.15% to 30,154 points at the close, while the large S&P 500 index gained 0.18% to 3,701 points, just 1 point from its last high. Rich in technology and biotech stocks, the Nasdaq Composite Index rose 0.50 percent to 12,658 points, its second consecutive high.
On Wednesday, at its last meeting of the year the U.S. Federal Reserve did not change its monetary policy, but tried to reassure investors that it plans to continue its massive support until the current health crisis has been weathered by the U.S. economy.
The central bank was also much more positive about the recovery of the economy and the labor market than before. Fed President Jerome Powell welcomed the hope of vaccinating coronavirus, but stressed that short-term uncertainties remain.
The Fed boss said he was concerned about the next four to five months, but in the second half of 2021 he expected good economic growth. He believed that the federal government’s extra budget funding was strongly justified, as a $900 billion deal was being negotiated in Congress.
Jerome Powell indicated that if necessary, the Fed could increase its support even further. He added, “We continue to believe that the current policy is appropriate, but we have the flexibility to provide more accommodative measures. And we are aware that circumstances could change.”