Stocks staged a rally on Wednesday after Federal Reserve Chair Jerome Powell confirmed that the central bank is planning to slow the pace of its rate-hiking campaign. The Dow Jones Industrial Average soared over 700 points, while the S&P 500 and Nasdaq Composite jumped over 3% and 4%, respectively.
Here's how the market settled on Wednesday:
S&P 500 Index
Dow Jones Industrial Average
Nasdaq Composite Index
In remarks Wednesday, Powell echoed recent statements for other central bank officials, saying he believes the Fed is positions to reduce the size of interest rate hikes as soon as next month.
"It makes sense to moderate the pace of our rate increases as we approach the level of restraint that will be sufficient to bring inflation down," Powell said in a speech at the Brookings Institution in Washington, D.C. "the time for moderating the pace of rate increases may come as soon as the December meeting."
However, Powell still cautioned that the central bank may need to maintain its restrictive policy for the long-term as it continues to combat inflation. "Despite some promising development, we have a long way to go in restoring price stability," Powell said.
Powell's comments brought in another wave of optimism on Wall Street towards the pace of interest rate hikes decelerating heading into the new year. Earlier in the week, stocks fell lower as market participants grew concerned over potential supply-chain disruptions due to China's Zero-COVID policy and resulting nationwide protests.
Wednesday's rally also helped Wall Street end November on a high note, with the Dow and S&P 500 adding 5.7% and 5.4%, respectively, while the Nasdaq gained 4.4%.
Beyond Fedspeak, investors were also met with a series of fresh economic data on Wednesday.
To start, the ADP reported that U.S. private companies added 127,000 jobs in November, below expectations of 200,000, as the labor market continues to show signs of cooling.
"Turning points can be hard to capture in the labor market, but our data suggest that Federal Reserve tightening is having an impact on job creation and pay gains," said Nela Richardson, chief economist at ADP, in a statement. "In addition, companies are no longer in hyper-replacement mode. Fewer people are quitting and the post-pandemic recovery is stabilizing."
Next, U.S. job openings declined to a total of 10.33 million in October, down 10.86 million month-over-month, according to the Bureau of Labor Statistics' Job Openings and Labor Turnover Survey (JOLTS) report. Fed policymakers closely watch the JOLTS report for signs of labor market cooling.
Third, U.S. third-quarter GDP increased at a 2.9% annual rate, according to federal estimates. This report showed third-quarter GDP grew at a slightly faster pace than the 2.6% previously estimated.
Last, pending home sales--which reported signed contracts on existing U.S. homes--fell 4.6% in October, according to the National Association of Realtors. This report marked the fifth consecutive month of declines for the index.
