Call it the Powell rally.
The Dow Jones Industrial Average rose 618 points, or 2.5%, to close at 25,366 points Wednesday after Federal Reserve Chairman Jerome Powell signaled a possibly slower approach to raising interest rates.
During a speech before the Economic Club of New York, Powell said interest rates were “just below the broad range of estimates of the level that would be neutral for the economy.” The Federal Open Market Committee, the Fed’s policy-making body, has raised the federal funds rate three times this year to the current range of 2% to 2.25%, and decided on Nov. 8 to leave the rate unchanged. The next FOMC rate announcement is expected on Dec. 19.
More on the Fed: Why economists insist Powell wasn’t as dovish as the market thinks
Michael Brush believes a change in policy by the Fed is one of two likely events that will cause stocks to resume their upward climb.
The Dow Jones Industrial Average DJIA, +2.50% was down 6.5% from the end of October through Nov. 27, while the S&P 500 Index SPX, +2.30% was down 8%, and the Nasdaq Composite Index COMP, +2.95% was down 12%. On Wednesday, while the Dow rose 2.5%, the S&P 500 was up 2.3% and the Nasdaq was up 3%.
All 30 components of the Dow were up Wednesday, except for Verizon, which fell 1%. Caterpillar CAT, +4.95% led the benchmark index, showing the strongest gain of 5%, followed closely by Boeing BA, +4.86% which was up 4.9%.
Here’s how all 30 Dow stocks performed Wednesday:
Company Ticker Price change – Nov. 28 Price change – November Price change – 2018 through Nov. 28 Price change – 2017 Caterpillar Inc. CAR, +4.60% 5.0% 7.8% -17.0% 69.9% Boeing Co. BA, +4.86% 4.9% -6.0% 13.1% 89.4% Visa Inc. Class A