Stocks finished higher Wednesday after the Federal Reserve remained vague on when and how it will begin tapering its monthly bond purchases, easing concerns of a possible interest rate hike in the fall of next year.
The Dow Jones Industrial Average finished up 338 points, or 1%, to 34,258, while the S&P 500 advanced 0.95%, and the tech-heavy Nasdaq climbed 1.02%.
The dovish tone from the Fed, which released its statement at 2 p.m. Eastern time, added fuel to a bullish session sparked by a potential deal on debt payments from troubled property group China Evergrande.
"The lack of a formal taper announcement is clearly dovish, compared to a somewhat surprising hawkish dot plot, which now increases the odds of a rate hike in 2022," said Cliff Hodge, chief investment officer for Cornerstone Wealth. "This accelerated timeline is firmly ahead of consensus expectations for the first hike to not occur until 2023."
At first blush, Hodge said, it appears that Fed chair Jerome Powell "has successfully threaded the needle again."
Evergrande said it struck a deal with creditors over a $36 million payment due on a yuan-denominated bond Thursday. The property developer also owes a $47.5 million payment on a separate note on the same day.
A $90 billion liquidity injection from the People's Bank of China, amid the re-opening of stock markets following two days of Autumn holiday celebrations, also suggests Beijing remains vigilant ahead of tomorrow's debt payment deadlines.
The Evergrande breakthrough, alongside the passage of a bill by House lawmakers to fund the government through to Dec. 3, while suspending the debt ceiling until the end of next year, gave stocks an early boost that was extended by the Fed decision.
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SoFi Technologies (SOFI) - Get SOFI TECHNOLOGIES INC Report surged after analysts at Jefferies initiated coverage of the online financial services company with a buy rating Wednesday, calling it a "flywheel of growth opportunity."