US stocks rose for the second day in a row following Powell’s remarks

US stocks have continued to rise since the beginning of the North American trading on Thursday, with a boost of optimism left by expectations of an official interest rate cut by the Federal Reserve following the Fed’s announcement to keep the interest rate at the same levels without change one day ago.

The Dow Jones Industrial Average rose to 38,852 points after adding about 340 points, or 0.9%. The Standard & Poor’s 500 also rose to 5,265 points after achieving gains of about 31 points, or 0.7%. The Nasdaq Heavy Technology Industries also rose to 16,487 points, adding about 72 points, or 0.8%.

On Wednesday, the Federal Reserve kept the interest rate in the 5.25%-5.50% area without any change at the end of its meeting that began one day ago, which was in line with market expectations.

The central bank has been holding the interest rate at these levels since July 2023, when the Fed stopped raising interest after a series of interest decisions that previously raised key rates to historically high levels as part of the battle against inflation.

The interest statement indicated that members of the Federal Open Market Committee expect to cut interest rates three times – by 25 basis points each time – in 2024, which indicates the possibility that we will see the first cut in the federal interest rate since March 2022.

The current interest rate is at a 23-year high, a benchmark rate at which interest has now been in place for about six months.

Jerome Powell, Chairman of the Federal Open Market Committee, held a press conference after the Federal Reserve announced that it would keep the interest rate unchanged at the end of the current March meeting, during which he made statements that had a significant impact on the price movement in global financial markets on Wednesday.

It was clearly evident in Powell’s statements that he was inclined to review the Central Bank’s achievements in the recent period in terms of reducing inflation from the highest levels in about 40 years, as part of the efforts it has been making since March 2022 to combat inflation.

Jerome Powell said, in the press conference held after announcing the decision to keep rates unchanged on Wednesday: “Inflation has declined significantly in the recent period, but it is still very high,” stressing that the future path of prices is still shrouded in uncertainty.

“The economy has made significant progress, which pushes risks strongly into a balance zone,” Powell added, noting that the American housing sector was witnessing a noticeable deterioration last year.