US stocks moved higher on Thursday, looking to build on a Wednesday rally fueled by reassuring signals from Federal Reserve Chair Jerome Powell after the central bank held interest rates steady on Wednesday.
The Nasdaq Composite (^IXIC) led the gains, rising about 0.3%, while the Dow Jones Industrial Average (^DJI) and the S&P 500 (^GSPC) popped about 0.2%. All three major averages had initially opened lower.
The Fed's decision to keep interest rates unchanged on Wednesday was expected on Wall Street, but markets rallied, driven by a sense of relief that prior forecasts for two rate cuts this year held up. Doubts had been rising about the path to rate cuts amid concerns the US economy might buckle under President Trump's broad plans for tariffs.
Powell contributed to the good mood. Although the central bank indicated it expects higher inflation and slower economic growth, the Fed chair reassured investors that inflation impacts from tariffs will likely be "transitory" and recession risks remain low.
But Powell's comments came after the Fed, in updated projections, revised upward its forecast for inflation at the end of this year while sharply lowering its forecast for economic growth. Those broader economic sentiments have been weighing on markets for much of the past two months, with both the benchmark S&P 500 and tech-heavy Nasdaq sliding into correction territory.
For his part, Trump — who has largely refrained from weighing in on Fed policy thus far in a U-turn from his first term — looked set to amp up pressure on the central bank.
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