Moderate gains for US stocks

Stocks push higher after Fed rate decision

U.S. stocks closed higher on Wednesday, 19 June 2019 after the Federal Reserve kept interest rates unchanged as widely expected but dropped the reference to patient in its statement to indicate it is ready to make ease monetary policy if needed.

The Dow Jones Industrial Average rose 38.46 points, 0.2%, to 26,504 while the S&P 500 index added 8.71 points, or 0.3%, to 2,926.46 and the Nasdaq Composite Index gained 33.44 points, or 0.4%, to 7,987.32.

Most S&P 500 sectors finished higher, led by the defensive-oriented health care, utilities, and real estate sectors. The materials, energy, and financials sectors underperformed.

The Fed said it will closely monitor the economy given increasing uncertainty about government policy though it signaled it may not need to lower rates before 2020. The central bank remained mostly optimistic about the economic outlook, but said inflationary pressures have receded, compelling it to lower its forecast for PCE inflation in 2019 to 1.5% from 1.8%, below its 2% target. At the same time, it left its gross domestic product estimate at 2.1%.

After the Fed news, yields for benchmark debt were moving lower, with the yield for the 10-year Treasury note at 2.05%, which can make government debt less appealing to buyers seeking haven assets compared against bullion. The dollar index sliped 0.4% on Wednesday.

The FOMC's policy directive came in largely as expected. The fed funds rate was unchanged, the word "patient" was removed, and the directive noted that the Fed will act as appropriate to sustain the economic expansion amid increased uncertainties to the outlook. St. Louis Fed President James Bullard was the lone dissident among voting members, preferring to lower the fed funds rate by 25 basis points.

Bullion prices ended lower at Comex on Wednesday, 19 June 2019. old prices settled lower on Wednesday, easing back from the previous day's settlement at their highest in 14 months, then climbed after the U.S. Federal Reserve left key interest rates unchanged, but shifted away from its patient stands on rates.

August gold was at $1,354.20 an ounce shortly after the Fed announcement. The contract had declined by $1.90, or 0.1%, to settle at $1,348.80 an ounce. July silver shed 3.5 cents, or 0.2%, at $14.958 an ounce.

Crude oil futures settled modestly lower on Wednesday, 19 June 2019 giving up the gains they saw in the immediate wake of U.S. government figures that revealed a larger-than-expected drawdown in crude stockpiles, the first in three weeks.

West Texas Intermediate crude for July delivery fell 14 cents, or 0.3%, to settle at $53.76 a barrel on the New York Mercantile Exchange. The July contract, which expires at Thursday's settlement, climbed 3.8% Tuesday to finish at its highest in over a week.

August Brent crude shed 32 cents, or 0.5% to $61.82 a barrel on ICE Futures Europe. It wrapped up Tuesday at $62.14, the highest settlement in a week.

The weekly MBA Mortgage Applications, which was Wednesday's lone economic report, declined 3.4% following a 26.8% surge in the prior week.

Looking ahead, investors will receive the following reports on Thursday: weekly Initial and Continuing Claims, the Current Account Balance for the first quarter, the Philadelphia Fed Index for June, and the Conference Board's Leading Economic Index for May.

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