Stocks - Fed Promise to Protect Economic Growth Cheers Wall Street

Investing.com - Wall Street applauded -- but only politely -- for the Federal Reserve's vow Wednesday to move rates lower if economic uncertainties persist.

An actual rate cut might have set off a big rally, with the S&P potentially hitting a new high. But a rate cut is coming for sure in July, according to fed funds futures tracked by Investing.com's Fed Rate Monitor Tool.

As a result, the S&P 500 moved up 0.3%, the Nasdaq Composite added 0.42% and the Dow Jones industrials rose 0.15%.

The Federal Open Market Committee, the Fed's rate-setting body, held its key federal funds rate at 2.25% to 2.5%.

In a new conference after the Fed statement's release, Chairman Jerome Powell said the central bank is concerned about a number of factors affecting the domestic and global economies, including slowing manufacturing growth, trade tensions, especially between the United States and China, and inflation that's too low.

So, the Fed will do what it can to keep the economic expansion going. But while eight FOMC members see rates falling later this year, there wasn't much support to move rates immediately, Powell said. The one exception was James Bullard of the St. Louis Federal Reserve Bank who voted for a rate cut today.

The signal that a rate cut was coming helped push stocks higher after the markets flatlined for the morning and early afternoon,

Utilities, healthcare and real estate stocks were the top performing S&P 500 sectors, with energy, financial and materials stocks the laggards.

WTI oil futures dropped back slightly after Tuesday's big gain. Interest rates were lower, with the 10-year Treasury yield falling to 2.029%, its lowest level since Nov. 8, 2016.

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