Dow surges to close at new all-time high as the Fed signals 3 rate cuts in 2024

• US stocks rallied on Wednesday as investors dialed up their expectations for Fed rate cuts.
• The Dow Jones Industrial Average set fresh intraday and closing highs.

US stocks soared on Wednesday, with the Dow notching a new all-time-record as the Federal Reserve flashed a dovish signal.

The Dow jumped as high as 37,094.85, setting a new intraday record, while also topping the previous closing high of 36,799.65 that was set on January 4, 2022.

Central bankers kept interest rates level, but issued new projections that suggested 75 basis points of rate cuts are expected in 2024, a more than what the Fed previously indicated.

That sent bond yields plunging, with the yield on the 10-year US Treasury sinking more than 17 basis points to 4.03%.

Fed Chair Jerome Powell tried to sound cautious, saying "inflation is still too high and ongoing progress in bringing it down is not assured and the path forward is uncertain."

Markets, though, have already moved up their expectations for an interest rate cut in early 2024. Investors are now pricing in a 92% chance the Fed will cut rates at least once in the first quarter of next year, up from just a 34% chance priced in a month ago.

But that could be too optimistic, according to Principal Asset Management chief global strategist Seema Shah.

"Certainly, if growth is slowing and inflation is also heading back to target, a few rate cuts will make sense, albeit not quite as much as the five that the market is currently anticipating," she said in a statement on Wednesday. "For five to make sense, the economy really needs to stumble and the Fed needs to panic."

Here's where US indexes stood at the 4:00 p.m. closing bell on Wednesday:

• S&P 500: 4,707.09, up 1.37%
• Dow Jones Industrial Average: 37,090.24, up 1.40% (512.30 points)
• Nasdaq Composite: 14,733.96, up 1.38%

Here's what else is going on today:

• President Biden's low approval rating may be good news for stock investors.
• "Exaggerated concerns" about crude demand are what's hitting oil prices, OPEC said.
• Dollarization won't be enough to solve Argentina's roaring inflation problem, according to Nobel economist Paul Krugman.
• The hype for Magnificent Seven stocks is similar to the dot-com bubble. That's setting stocks up to slump as a recession strikes next summer, one veteran wealth manager says.

In commodities, bonds, and crypto:

• West Texas Intermediate crude oil rose 1.37% to $69.55 a barrel. Brent crude, the international benchmark, ticked higher 0.08% to $74.32 a barrel.
• Gold surged 1.89% to $2,017 per ounce.
• The 10-year Treasury yield plunged 17.6 basis points to 4.03%.
• Bitcoin rallied 3.72% to $42,661.