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The Dow Jones Industrial Average and S&P 500 rose on Thursday after the Federal Reserve unveiled a new framework that could keep interest rates lower for a longer period of time.
The 30-stock index came off its highs of the day, but still grew 160.35 points to finish at 28,492.97. Earlier in the session, the average traded positive for 2020.
The S&P 500 continued its record-breaking binge, gaining 5.82 points over Wednesday’s all-time peak to register at Thursday’s close at 3,484.55.
The NASDAQ Composite reversed 39.72 points from Wednesday’s all-time record close to finish at 11,625.34.
Bank stocks rose broadly. Citigroup gained 1.7%. JPMorgan Chase, Bank of America and Wells Fargo were all up at least 1.9%.
Those bank gains were offset as Big Tech shares fell across the board. Facebook let go of 3.5% and Netflix dropped 3.9%. Amazon, Alphabet and Apple were all down more than 0.9%. Microsoft bucked the negative trend in tech, rising nearly 2.5%.
Investors also pored through fresh economic data to gauge the health of the economy. The U.S. Labor Department said Wednesday the number of Americans who filed for unemployment benefits for the first time totaled one million last week, in line with expectations. It marked the second consecutive week that weekly jobless claims tallied more than one million.
Meanwhile, second-quarter Gross Domestic Product was revised to a 31.7% decline, versus a 32.5% drop estimated. The initial reading on July 30 showed a 32.9% fall in economic activity. While the latest reading is slightly better, it still marks the largest quarterly plunge on record.
In a speech, Fed Chairman Jerome Powell said the central bank formally agreed to a policy of “average inflation targeting.” In other words, the central bank will let inflation run “moderately” above its 2% goal for “some time.”
The central bank has for years tried to keep inflation at 2%, a rate of price increase that policymakers consider both manageable and indicative of a healthy economy. But ever since the financial crisis, inflation in the U.S. has more often than not lagged the Fed’s target.
Prices for the 10-Year Treasury wavered, boosting yields to 0.74% from Wednesday’s 0.69%. Treasury prices and yields move in opposite directions.
Oil prices shed 41 cents to $42.98 U.S. a barrel.
Gold prices slid $15.30 to $1,937.70 U.S. an ounce.
