US stocks rallied towards new highs on Thursday.
The major indexes had their worst day since the election Wednesday after the Federal Reserve said it was raising its benchmark interest rate.
This announcement was already expected. But in addition, the Fed raised its projection for the number of rate hikes next year from two to three, It also lifted its long-term interest rate outlook for the first time since 2012, when it started releasing projections.
At 11:22 a.m. ET, the Dow is up 155 points (0.78%) to 19,945.87, still short of the round-number 20,000 milestone.
The S&P 500 is up 18 points (0.80%) to 2,271.25, while the Nasdaq is up 45 points (0.45%) to 5,482.04.
The financials sector of the S&P 500 led gains, up by 1.65%. The sector has rallied since the election on hopes that the new administration will loosen the regulatory environment and cut taxes.
Meanwhile, global bond markets continue to sell off. US treasury yields are up almost 20 bps in some parts of the curve since Wednesday’s Fed decision. The benchmark 10-year yield on Thursday rose 8 basis points to 2.61%, near the highest level in about three years.
In economic data, i
nitial jobless claims fell by 4,000 to 254,000 last week, according to the Department of Labour, holding below 300,000 for a 93rd week. The core consumer price index, which gauges inflation and excludes food and energy costs, rose by 2.1% year-on-year, lower than the 2.2% expected.
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