The Dow Jones index gained 1.26% to 34,408.06 points and the S&P 500 1.22% to 4,425.84 points while the Nasdaq rose 1.15% to 13,782.82 points, to reach its highest level since April 2022.
"Investors look at what the Fed does rather than what it says. Actions are stronger than words," said Jack Ablin of Cresset Capital.
On Wednesday, the U.S. central bank left rates unchanged in a range of 5.00% and 5.25% for the first time in more than a year, but the Monetary Committee's average forecast sees them still rising to 5.60% by the end of the year, which would imply two further hikes of 25 basis points.
"I think markets are concluding that the Fed is determined not to let inflation escape the rise and will do everything to curb it, but at the same time they see inflation moving in the right direction," said Tom Cahill of Ventura Wealth Management.
Not only did stock market indices soar, but the dollar fell sharply, due to an ECB rate hike. A pullback in the greenback is generally good for equities.
"If you look at interest rates" in the bond market, "they're falling," Cahill said. "Not only does the stock market not believe the Fed will be able to raise rates twice, but neither does the bond market," he said.
Ten-year U.S. Treasury yields eased to 3.71% from 3.78% the previous day. Those at two years rose to 4.63% against 4.68%.
Investors also digested a flood of indicators on Thursday, including retail sales in the United States for May, which rose more than expected (+0.3%).
In other good news on the inflation side, import prices fell by 0.6% last month.
Finally, China has taken measures to stimulate its economy by lowering a benchmark rate for medium-term loans and injecting liquidity into its economy.
On the value side, the eleven sectors of the S&P ended in the green, with healthcare, communication and industrials leading the rise.
A small wind of renewal has blown with the very successful IPO of Cava, a fast food chain of Mediterranean cuisine.
The stock introduced at $ 22 has almost doubled to finish at $ 43.78 and register a valuation of $ 4.8 billion for this brand of more than 260 restaurants, created in 2011 but not yet profitable.
Its competitor, the Sweetgreen chain, listed on the stock market in 2021, suffered (-4.22%).
The title of Goldman Sachs, more fit during the day, has slowed its rise (+0.39%) after an article in the Wall Street Journal indicating that the Fed and the policeman of the stock exchange, the SEC, were looking into how the bank handled the file of the regional bank SVB before its bankruptcy.
The Adobe software group ended up 2.37% to $ 490.91 just before reporting better-than-expected results in the second quarter, boosted by strong demand for the cloud business (remote computing). In electronic trading after the close, the stock was still up 3.42%.
On the Nasdaq, Microsoft climbed 3.19% to $ 348.10, the mega-cap touching a new record at almost $ 2.600 trillion.
© 2023 AFP