Stock market today: Wall Street holds most of its gains after Federal Reserve keeps rates steady

NEW YORK — U.S. stocks are holding onto most of their gains for the day after the Federal Reserve held its main interest rate steady. The S&P 500 was 0.9% higher Wednesday afternoon after rising as much as 1.3% earlier following a surprisingly encouraging report on inflation. The Dow Jones Industrial Average was close to flat, while the Nasdaq composite was up 1.6%.

For Wall Street, a slowdown in inflation not only helps U.S. households struggling to keep up with fast-rising prices, it also opens the door for the Federal Reserve to cut its main interest rate. Such a move would ease pressure on the economy and give a boost to investment prices. “This is good news, but we will need more of it,” according to Lindsay Rosner, head of multi-sector investing within Goldman Sachs Asset Management.

That had areas of the stock market that tend to benefit most from lower interest rates doing the best amid a widespread rally. Lower interest rates could also pull down mortgage rates and inject energy into the housing market. Homebuilder D.R. Horton climbed 4.8%.

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Federal Reserve sees some progress on inflation but envisions just one rate cut this yearWASHINGTON (AP) — Federal Reserve officials said Wednesday that inflation has fallen further toward their target level in recent months but signaled that they expect to cut their benchmark interest rate just once this year.
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