Stock Market Surges as Fed Holds Rates, Tesla and Boeing Lead Gains

The S&P 500 surged 1.1% on Wednesday after the Federal Reserve left interest rates unchanged and maintained its forecast for two rate cuts in 2024, despite acknowledging persistent inflation. The Dow Jones rose 383 points (0.9%), while the NASDAQ gained 1.4%.

The Fed kept rates in the 4.25%-4.5% range, with projections showing a decline to 3.9% by year-end, unchanged from December. Inflation forecasts increased, but Fed Chair Jerome Powell suggested weaker economic growth might offset rising prices. Powell emphasized that while sentiment indicators softened, economic fundamentals, including the labor market, remain strong.

Tesla jumped over 4% after securing an initial regulatory approval for its robotaxi service in California. The California Public Utilities Commission granted the company a transportation permit, a crucial step toward launching autonomous ride services.

Boeing soared 7% as CFO Brian West highlighted improved operations. Meanwhile, Nvidia climbed more than 2% after CEO Jensen Huang downplayed concerns over tariff impacts.

General Mills, however, fell 2% after forecasting a significant decline in sales and profit due to increased competition from lower-cost private label brands.

Despite inflation concerns, analysts believe the Fed will prioritize labor market stability over short-term price increases. Investors remain optimistic about the central bank’s rate-cut timeline, fueling market gains.