[New York Stock Market] Nasdaq Up 1.04%, 3 Major Indexes Close at Record Highs... Relief After FOMC Results

▲Jerome Powell, Chair of the Federal Reserve (Fed) [Image source=Reuters Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] The New York stock market closed at all-time highs for the three major indices as investors were relieved by the results of the Federal Open Market Committee (FOMC) regular meeting.

On the 3rd (local Eastern Time), at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 36,157.58, up 0.29% (104.95 points) from the previous session.

The Standard & Poor's (S&P) 500 index also rose 0.65% (29.92 points) to 4,660.57, and the tech-heavy Nasdaq index closed at 15,811.58, up 1.04% (161.98 points) from the previous session.

All three major indices set new all-time highs for the fourth consecutive trading day.

Investors showed relief following the FOMC regular meeting results and the press conference by Jerome Powell, Chair of the Federal Reserve (Fed). The Fed announced that it would begin tapering its $120 billion asset purchase program starting in November.

The Fed described this move as a normalization process, contrasting it with the extraordinary monetary policies implemented in response to the COVID-19 emergency.

Accordingly, the Fed plans to reduce asset purchases by $15 billion each month in November and December ($10 billion in Treasury securities and $5 billion in mortgage-backed securities), then adjust the pace of purchases based on economic outlook. If on schedule, the program is expected to end by July next year.

The Fed stated, "The Committee judges that reducing the pace of net asset purchases by a similar amount each month will likely be appropriate, but it is prepared to adjust the pace of purchases if economic outlook changes."

The Fed kept interest rates unchanged and reiterated that tapering should not be interpreted as a signal that rate hikes are imminent.

Chair Powell said, "Tapering does not represent a direct signal regarding our interest rate policy," aiming to curb expectations of rate increases.

The Fed assessed that inflation is rising largely due to temporary factors and that supply chain issues have played a significant role in price increases in some sectors.

Economic indicators released that day also came out positively, driving the rally in the New York stock market.

According to the ADP National Employment Report, private sector employment increased by 571,000 in October compared to the previous month. This significantly exceeded the Wall Street Journal (WSJ) experts' forecast of 395,000. The September figure was revised downward from 568,000 to 523,000.

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