Sept. 22 (UPI) — The Dow Jones Industrial Average gained 338 points on Wednesday to snap a four-day losing streak as markets reacted to the Federal Reserve committing to keep its pandemic monetary policies in place.
The blue-chip index closed the day up 1%, while the S&P 500 gained 0.9% and the Nasdaq Composite rose 1.02% following the news from the closing of the Federal Open Market Committee’s two-day meeting.
In response to the COVID-19 pandemic the central bank has been purchasing $120 billion a month of Treasurys and mortgage-backed securities and in its post-meeting statement the Fed said “a moderation in the pace of asset purchases may soon be warranted” but did not set a specific date.
“While a taper announcement, maybe, is coming in November, that they didn’t do so today just reflects a still uber dovish committee,” Peter Boockvar, chief investment officer at Bleakley Advisory Group said, according to CNBC.
The committee also voted unanimously to keep short-term interest rates at 0% to 0.25%, the same level since March 2020, although the Fed hinted at a potential interest rate hike in 2022.
Wednesday’s news had little impact on bond yield with the 2-year treasury yield rising above 0.24% and the 10-year rate falling below 1.3% to a session low following the meeting before ultimately rising back up to 1.33%.
Commodity-related stocks bounced back on Wednesday as investors saw concerns about Chinese property developer Evergrande’s debt crisis ease.
APA stock grew 7.19%, Devon Energy gained 6.84%, Diamondback energy rose 5.42% and Marathon Oil climbed 5.35%.
Wednesday’s gains came as the three major indexes have struggled in September with the Dow down 3% on the month, while the S&P has fallen 2.8%.