Dow closes at record high for second straight day

The Dow Jones Industrial Average closed at a record high for a second straight day Thursday as Wall Street continued to celebrate indications from the Federal Reserve that it could be nearing an end to its rate hike campaign.

The Dow closed at 37,256, up 158 points or 0.43 percent from the day before. The major index surpassed 37,000 for the first time Wednesday, after the Fed announced its plans to hold interest rates steady for a third consecutive meeting.

The central bank also signaled that it is likely to begin cutting rates next year, with all but three Fed officials indicating in economic projections released Wednesday that they expect at least two rate cuts in 2024.

The Fed has raised interest rates repeatedly over the past two years in an effort to tame stubborn inflation. After peaking at a 40-year high of 9.1 percent in June 2022, inflation has eased significantly, falling to 3.1 percent as of November. 

“Inflation has eased from its highs, and this has come without a significant increase in unemployment. That’s very good news,” Fed Chair Jerome Powell said at a press conference Wednesday. “But inflation is still too high.”

The Fed would like to bring inflation back down to its target rate of 2 percent. However, as inflation continues to fall and the labor market shows signs of cooling, Powell noted that the central bank is “likely at or near the peak rate for this cycle.”