The Nasdaq hit a record intraday high on Thursday amid broad gains in U.S. stocks, a day after the Federal Reserve stood pat on interest rates.
While the risks to economic outlook were roughly “balanced”, the Fed maintained rates as inflation continued to run below its 2 percent target and members saw room for improvement in the labor market.
The central bank slowed the pace of future hikes and cut its longer run interest rate forecast to 2.9 percent from 3 percent, but sent a strong signal for a move by the end of this year.
“The Fed probably appeared less hawkish than what the markets had expected,” said Ryan Larson, head of equity trading at RBC Global Asset Management in Chicago. “I think the market continues to be focused on the Fed pushing a hike for later as a good thing rather than bad.”
The consensus among economists is for a hike in December as the Fed’s November meeting comes right around the U.S. Presidential elections.
The probability of a November hike stands at a modest 12.4 percent, and rises to 58.4 percent for December, according to the CME Group’s FedWatch tool.
The dollar index .DXY dropped 0.6 percent on Thursday, and was on track to mark the second straight day of losses after the central bank’s decision.