Investing.com – Wall Street raced to record highs on Wednesday buoyed by growing expectations that an agreement on final tax bill would reach President Donald Trump before year-end, while bullish expectations from the Federal Reserve on future growth lifted sentiment.
The Dow Jones Industrial Average closed higher at 24,585.43. The S&P 500 closed 0.05% lower, while the Nasdaq Composite closed at 6875.80, up 0.20%.
The Federal Reserve approved its third rate hike of 2017, and forecasts further rate hikes despite growing concerns over the slow pace of inflation.
Fed officials also expressed optimism in the economy, hiking their projection for economic growth in 2017 to 2.5%, while growth in 2018 was expected to rise to 2.5%, a 0.4% increase from the Fed’s September projections.
The report raised investor expectations for ongoing bullish economic growth, lifting sentiment on risker assets like equities.
Also supporting an uptick in US stocks were comments from Trump, who said he hopes to sign the tax bill “in a very short period of time”, and stressed that it was “very important for the country” that Congress vote on it next week.
Investors had to contend with an economic report pointing to underlying weakness in inflation as consumer prices rose at a slower pace than economists’ had anticipated.
The Labor Department said on Wednesday its Consumer Price index rose 0.4% last month. In the twelve months through November, core-inflation, however, undershot expectations rising just 1.7%. Economists expected.
Fed chair Janet Yellen downplayed the recent slowdown inflation, insisting that softness in inflation related to “transient factors”.
'Bulls and Bears' on Wall Street
The top Dow gainers for the session: Caterpillar Inc (NYSE:CAT) up 3.6%, Nike (NYSE:NKE) up 3.4% and Coca-Cola Company (NYSE:KO) up 1.3%
International Business Machines (NYSE:IBM) down 1.8, American Express Company (NYSE:AXP) down 1.6% and JPMorgan Chase & Co (NYSE:JPM) down 1.3%, were among the worst Dow performers of the session.