[DigitalToday reporter Sangyeop Oh] Wall Street’s three main stock indexes ended higher. The Federal Open Market Committee cut rates by 25 basis points, and investors welcomed remarks from Federal Reserve Chair Jerome Powell that were seen as more dovish than expected.

On Dec. 10, the Dow Jones Industrial Average closed up 497.46 points, or 1.05 percent, at 48,057.75 on the New York Stock Exchange. The S&P 500 rose 46.17 points, or 0.67 percent, to 6,886.68, and the Nasdaq Composite gained 77.67 points, or 0.33 percent, to end at 23,654.16.

The Fed said in a statement released after its two-day regular FOMC meeting that it would cut the target range for the federal funds rate to 3.50 to 3.75 percent, a 25-basis-point reduction. It was the third consecutive 25-basis-point cut.

Before the meeting, markets expected the FOMC gathering to be somewhat hawkish. The dominant view was that even if the Fed cut rates, the statement and Powell’s press conference would carry a hawkish tone to reassure members advocating a rate hold.

The statement added hawkish wording. On future rate decisions, it included language saying it would consider the scale and timing of further adjustments, signalling a more cautious approach. Markets read that as a signal of a rate hold for the time being.

But Powell’s press conference leaned more dovish than expected, surprising the market.

Powell dismissed the possibility of rate hikes, saying, "I don’t think any FOMC participant basically has as a baseline forecast that the next move will be a rate increase." After a senior European Central Bank figure recently mentioned the possibility of rate hikes, there was a sentiment in the market that it wanted to confirm the Fed’s stance.

Powell also said of the current policy rate level, "I think we are now within the range of neutral, and toward the upper end of it," leaving room for additional rate cuts. After those remarks, stock indexes extended gains and the 2-year yield extended its decline to as much as 8 basis points.

According to the CME FedWatch Tool, federal funds rate futures markets are pricing a 43.2 percent chance of a 25-basis-point cut by April next year, and a 40.1 percent chance of no change. The prevailing view is that rates will be held at least through the first quarter of next year.

Among mega tech companies with market capitalisations of $1 trillion or more, Microsoft fell 2.74 percent. Amazon, Broadcom, Alphabet and Tesla rose in the 1 percent range. Oracle plunged more than 6 percent in after-hours trading after third-quarter revenue missed market expectations.

Warner Bros Discovery rose 4.49 percent again, influenced by Paramount Skydance’s hostile takeover bid. It was nearing Paramount’s tender offer price of $30. Netflix fell 4.14 percent on concerns it could fail to acquire Warner Bros.