Dow Jones Soars as Fed Delivers Third Straight Rate Cut

The Dow Jones Industrial Average powered higher on Wednesday, rising more than 1.2% after the Federal Reserve announced its third consecutive interest-rate cut. The move instantly boosted market sentiment, pushing the Dow toward four-week highs as investors grew more confident that additional easing could follow in the coming months.

The Fed’s decision, combined with its acknowledgment that the labor market is starting to cool, signaled to traders that the central bank may now be leaning toward supporting economic growth rather than tightening further. Although policymakers projected only a modest pace of cuts next year, markets quickly priced in the possibility of deeper reductions ahead.

Major indices reacted unevenly. The S&P 500 edged higher and now sits within reach of its recent record, while the Nasdaq held mostly flat. Still, the tone across Wall Street was largely upbeat as the year’s final Fed meeting provided clarity after weeks of mixed signals.

Banks were among the day’s strongest performers. Regional lenders rallied as lower borrowing costs revived hopes for improved lending activity. Investors also took note of rare internal disagreement at the Fed, where three policymakers parted ways with the majority — the first such split in six years — highlighting ongoing debate about how quickly rates should fall.

Despite the division, the broader market embraced the message that the risk of further tightening has eased. For now, traders appear confident that the path ahead points toward a softer policy stance, giving equities fresh momentum as the year draws to a close.