FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., March 13, 2019. REUTERS/Brendan McDermid
NEW YORK (Reuters) – The S&P 500 and the Nasdaq reversed earlier losses, gaining ground after the U.S. Federal Reserve concluded its two-day policy meeting by holding a key interest rate steady and affirming its dovish monetary policy stance.
The central bank also indicated it sees no further rate hikes this year, and released details of a plan to end the monthly reduction of its balance sheet.
“It definitely skewed on the dovish side of expectations,” said Evan Brown, head of macro asset allocation strategy at UBS Asset Management in New York. “The main surprise is that the Fed projects zero hikes in 2019.”
All three major U.S. stock indexes started the session in the red, but the S&P 500 and the Nasdaq turned positive after the release of the policy-making Federal Open Market Committee’s statement. The Dow narrowed its losses.
Rate-sensitive financial stocks were the largest percentage losers among the 11 major sectors of the S&P 500.
U.S. stocks have rallied since the beginning of the year, when Fed chair John Powell said the Fed would take a “patient” approach to monetary policy.
Powell is due to hold a press conference at 2:30 EST.
The Dow Jones Industrial Average fell 24.91 points, or 0.1 percent, to 25,862.47, the S&P 500 gained 1.9 points, or 0.07 percent, to 2,834.47, and the Nasdaq Composite added 24.27 points, or 0.31 percent, to 7,748.21.
Reporting by Stephen Culp; additional reporting by Kate Duguid; editing by Jonathan Oatis