Nov. 28 (UPI) — The Dow Jones rose by more than 600 points Wednesday after the chairman of the Federal Reserve said interest rates were close to neutral, continuing a rebound for the market.
The Dow was up 617.7 points, or 2.5 percent, to 25,366.43 at the end of trading Wednesday, marking its largest single-day gain since March 26. Meanwhile the S&P 500 was up 2.3 percent and the Nasdaq Composite rose 2.95 percent. All three major indexes rose for the third consecutive day.
The day’s surge in stock prices came after Federal Reserve Chairman Jerome Powell said not to expect big hikes in interest rates in the near future.
“Interest rates are still low by historical standards, and they remain just below the broad range of estimates of the level that would be neutral for the economy — that is, neither speeding up nor slowing down growth,” Powell said during a speech at the Economic Club of New York.
Powell added the Federal Open Market Committee, which sets rates, will make policy decisions based on developing conditions, not through a predetermined plan.
His remarks were a departure from comments he made at the beginning of October, stating the interest rates were a “long way from neutral.”
The months following Powell’s original comments were difficult for the stock market as the interest rate, concerns over the ongoing trade war with China and turbulence in the tech sector left all three major indexes in correction territory before bouncing back this week.
As stocks began this late November turn, many of these problems began to fade. Members of the previously underperforming FAANG group of stocks saw increases on Wednesday, as Amazon and Netflix increased 6 percent, Apple and Google‘s parent company Alphabet both rose more than 3.5 percent and Facebook was up 1.3 percent.
Stocks also saw a mild increase on Tuesday after White House economic advisor Larry Kudlow said the United States had resumed talks with China “on all levels,” as they seek a deal to end the trade war.
