NEW YORK (AP) — U.S. stocks climbed Wednesday after the Federal Reserve said the economy still looks healthy enough to keep interest rates where they are. Wall Street also got a boost from easing yields in the bond market.
The S&P 500 jumped 1.1%. The Dow Jones Industrial Average added 383 points, or 0.9%, and the Nasdaq composite rose 1.4%.
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People work on the options floor at the New York Stock Exchange in New York, Wednesday, March 19, 2025. (AP Photo/Seth Wenig)
People work on the options floor at the New York Stock Exchange in New York, Wednesday, March 19, 2025. (AP Photo/Seth Wenig)
People work on the floor at the New York Stock Exchange in New York, Wednesday, March 19, 2025. (AP Photo/Seth Wenig)
People work on the options floor at the New York Stock Exchange in New York, Wednesday, March 19, 2025. (AP Photo/Seth Wenig)
People work on the floor at the New York Stock Exchange in New York, Wednesday, March 19, 2025. (AP Photo/Seth Wenig)
People work on the options floor at the New York Stock Exchange in New York, Wednesday, March 19, 2025. (AP Photo/Seth Wenig)
The rally followed weeks of sharp and scary swings for the U.S. stock market. Uncertainty is high about how much pain President Donald Trump will allow the economy to endure in order to remake the system. He’s said he wants manufacturing jobs back in the United States and far fewer people working for the federal government.
Trump’s barrage of announcements on tariffs and other policies have created so much uncertainty that economists worry U.S. businesses and households may freeze and pull back on their spending.
Fed Chair Jerome Powell acknowledged the rising pessimism among U.S. consumers and companies shown by recent surveys, but he also pointed to data showing the economy is solid at the moment, such as a relatively low unemployment rate. He said it’s possible to have periods where “people say downbeat things about the economy and then go out and buy a new car.”
“Given where we are, we think our policy is in a good place to react to what comes, and we think that the right thing to do is to wait here for greater clarity about what the economy’s doing,” Powell said.
The Fed has been holding interest rates steady this year, after cutting them sharply through the end of last year. While lower rates can help give the economy a boost, they can also push inflation upward.
Fed officials indicated they’re still penciling in two cuts to the federal funds rate by the end of this year, just as they were forecasting at the end of last year. But they are also seeing weaker growth for the U.S. economy and higher inflation than they were before. More than anything, the message from the Fed seemed to be how much uncertainty is clouding everything.
“What would you write down?” Powell said when asked about the continued forecasts for two cuts to rates this year. “It’s really hard to know how this is going to work out.”
Powell, though, pushed back against fears about what’s called “ stagflation,” where the economy stagnates but inflation remains high. The Fed doesn’t have good tools to fix such a toxic combination. The last time the U.S. economy suffered through it was in the 1970s, and Powell said, “I wouldn’t say we’re in a situation that’s remotely comparable to that."
Stocks also got a boost from lower Treasury yields in the bond market. When Treasurys are paying investors less in interest, they can encourage investors to pay higher prices for stocks.
The yield on the 10-year Treasury dropped to 4.24% from 4.31% just before the Fed announced its decision. The Fed said it will also begin paring the monthly reductions of its trove of Treasurys beginning in April. Such a move can help keep longer-term yields lower than they would otherwise be.
Powell repeated several times that the move was more technical than a hint about coming changes in policy. “It isn’t sending a signal in any hidden way,” he said.
Yields for shorter-term Treasurys also fell as traders built up expectations for the Fed to deliver as many as three cuts to rates by the end of this year. They're betting on a 55% chance of that, up from 44% a day earlier, according to data from CME Group.
On Wall Street, Nvidia helped support the market after rising 1.8% to cut its loss for the year so far to 12.5%. It hosted an event Tuesday where it largely “did a nice job laying out the roadmap” and fighting back against speculation the artificial-intelligence industry is seeing a slowdown in demand for computing power, according to UBS analysts led by Timothy Arcuri.
Tesla rose 4.7%, following two straight losses of roughly 5%. It’s still down 41.6% for 2025 so far. It’s been struggling on worries that customers are turned off by CEO Elon Musk’s leading efforts to slash spending by the U.S. government.
On the losing side of Wall Street was General Mills, which fell 2.1% despite reporting a stronger profit for the latest quarter than analysts expected.
The cereal and snack maker’s revenue fell short of analysts’ targets, in part because of a slowdown in sales for snacks. General Mills also cut forecasts for revenue and profit over its full fiscal year, partly because it expects “macroeconomic uncertainty” to continue to affect its customers.
All told, the S&P 500 rose 60.63 points to 5,675.29. The Dow Jones Industrial Average gained 383.32 to 41,964.63, and the Nasdaq composite jumped 246.67 to 17,750.79.
In stock markets abroad, Japan’s Nikkei 225 slipped 0.2% after the Bank of Japan held steady on its own interest rates, as was widely expected. Japan also reported a trade surplus for February, with exports rising more than 11% as manufacturers rushed to beat rising tariffs imposed by Trump.
Other indexes were mixed across Europe and Asia.
AP Business Writers Yuri Kageyama and Matt Ott contributed.
People work on the options floor at the New York Stock Exchange in New York, Wednesday, March 19, 2025. (AP Photo/Seth Wenig)
People work on the options floor at the New York Stock Exchange in New York, Wednesday, March 19, 2025. (AP Photo/Seth Wenig)
People work on the floor at the New York Stock Exchange in New York, Wednesday, March 19, 2025. (AP Photo/Seth Wenig)
People work on the options floor at the New York Stock Exchange in New York, Wednesday, March 19, 2025. (AP Photo/Seth Wenig)
People work on the floor at the New York Stock Exchange in New York, Wednesday, March 19, 2025. (AP Photo/Seth Wenig)
People work on the options floor at the New York Stock Exchange in New York, Wednesday, March 19, 2025. (AP Photo/Seth Wenig)
Israeli airstrikes overnight into Thursday struck several homes in the Gaza Strip and killed at least 85 Palestinians, according to local health officials. Among those pulled alive from the ruble was a month-old baby girl, but her parents and brother were killed.
Hamas fired three rockets at Israel on Thursday without causing casualties. It was the first such attack since Israel resumed heavy bombardment of Gaza on Tuesday, shattering the ceasefire that had halted the 17-month war. The Israeli military also restarted its blockade of northern Gaza, including Gaza City, which it maintained for most of the war. It said people would only be allowed to leave and head south on Gaza's coastal road.
And in Israel, hundreds of people demonstrated outside Prime Minister Benjamin Netanyahu’s residence in Jerusalem to protest his handling of the hostage crisis and his plan to fire the country’s head of internal security.
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Britain’s top diplomat, Foreign Secretary David Lammy, told the House of Commons "it’s difficult to see how denying humanitarian assistance to a civilian population can be compatible with international humanitarian law.”
Although he said it's for courts not governments to decide, Lammy said it was “appalling and unacceptable” for Israel to block aid and electricity to Gaza.
He said Israel’s actions “reinforce” the U.K. decision last year to suspend some arms exports to the country.
Earlier this week Lammy said Israel had broken international law, but later reverted to the government’s longstanding position that Israel’s actions are “at clear risk” of breaching the law.
The evacuation order covers Bani Suheila near the southern city of Khan Younis. Israel’s military said it would operate there in response to rocket fire by Hamas.
Thursday’s order expands on a new Israeli-imposed buffer zone along Gaza’s northern and eastern borders.
Israel Katz, the Israeli defense minister, said a day earlier that the military would soon order Palestinians to evacuate from combat zones.
As rescuers dug through the remains of a collapsed apartment building in Gaza’s Khan Younis on Thursday, they could hear the cries of a baby from underneath the rubble.
Suddenly, calls of “God is great” rang out. A man sprinted away from the wreckage carrying a living infant swaddled in a blanket and handed her to a waiting ambulance crew. The baby girl stirred fitfully as paramedics checked her over.
“When we asked people, they said she is a month old and she has been under the rubble, since dawn,” said Hazen Attar, a civil defense first responder. “She had been screaming and then falling silent from time to time until we were able to get her out a short while ago, and thank God she is safe.”
The girl was identified as Ella Osama Abu Dagga. She had been born 25 days earlier, in the midst of a tenuous ceasefire that many Palestinians in Gaza had hoped would mark the end of a war.
The girl's parents and brother were killed in the overnight Israeli airstrike, along with another family that included a father and his seven children. Only her grandparents survived.
Hundreds of Israelis gathered outside Prime Minister Benjamin Netanyahu’s residence in Jerusalem on Thursday to protest his handling of the hostage crisis and his plan to fire the country’s head of internal security.
Police used a water canon to disperse the crowd after protestors tried to break through police barricades, and scuffles erupted. Several demonstrators were thrown to the ground by police officers – including an opposition legislator, according to Israeli media reports.
On Wednesday, a mass march and demonstration outside the Israeli parliament continued into the late evening hours and ended with several arrests.
The protests come amid a renewed Israeli offensive in Gaza and ahead of a planned vote by the government to dismiss the head of internal security, a move that many view as undermining the balance of powers in Israel.
Three rockets launched at Israel from the Gaza Strip on Thursday set off sirens across the Tel Aviv metropolitan area. Hamas claimed the attack, which appeared to be the first out of Gaza since Israel ended a ceasefire with a surprise bombardment of the territory on Tuesday.
The Israeli military said it intercepted one of the rockets, and two others fell in open areas. There were no reports of injuries.
Earlier on Thursday, a missile launched toward Israel by Yemen’s Iran-backed Houthi was intercepted before it reached Israeli airspace.
Iran’s Supreme Leader Ayatollah Ali Khamenei has called the strikes on Yemen a “crime” that “should be prevented.”
In a message marking the Iranian New Year, he said Muslim nations must unite to resist the “Zionist Regime," referring to Israel. He called the U.S. an accomplice in the resumption of Israel’s strikes on Gaza and said the strikes by Israel have been carried out by “the U.S. permission, or support and green light.”
In a separate message, President Masoud Pezeshkian urged for domestic integrity, improving relation with neighbouring nations and other nations in the world.
The death toll from new Israeli strikes on Gaza has climbed to 58, according to hospitals in the territory.
Multiple homes were targeted in the middle of the night late Wednesday and early Thursday. The latest total of those killed was according to three hospitals in different parts of the territory.
The strikes hit houses in the cities of Khan Younis and Rafah in southern Gaza and the northern town of Beit Lahiya, they said.
The European Hospital in the southern city of Rafah said 26 people, mostly women and children, were killed in strikes on two family homes overnight. One of the strikes killed a father and his seven children, it said.
The Nasser Hospital in Khan Younis received the bodies of seven people killed overnight in an attack on a home. In northern Gaza, the Indonesian Hospital said it had received the bodies of seven people killed in a strike on a home in Beit Lahiya, a town near the border.
The Israeli military said it intercepted a missile launched by Yemen’s Iran-backed Houthi rebels early Thursday before it reached Israeli airspace, as air raid sirens and exploding interceptors were heard in Jerusalem. No injuries were reported.
It was the second such attack since the United States began a new campaign of airstrikes against the rebels earlier this week.
The bodies of victims of an Israeli army airstrike are prepared for burial at Indonesia Hospital in Beit Lahia, northern Gaza Strip, Thursday, March 20, 2025. (AP Photo/Jehad Alshrafi)
The bodies of victims of an Israeli army airstrike arrive for burial at the Indonesia Hospital in Beit Lahia, northern Gaza Strip, Thursday, March 20, 2025. (AP Photo/Jehad Alshrafi)
In this photo released by the Iranian Presidency Office, President Masoud Pezeshkian addresses the nation in a televised speech marking the Iranian New Year, called Nowruz, in Tehran, Iran, Thursday, March 20, 2025. (Iranian Presidency Office via AP)
Buildings destroyed during the Israeli air and ground offensive in the Gaza Strip as seen from southern Israel, Thursday, March 20, 2025. (AP Photo/Leo Correa)
People walk surrounded by buildings destroyed during the Israeli air and ground offensive in the Gaza Strip as seen from southern Israel, Thursday, March 20, 2025. (AP Photo/Leo Correa)
In this photo released by the official website of the office of the Iranian supreme leader, Supreme Leader Ayatollah Ali Khamenei addresses the nation in a televised speech marking the Iranian New Year, or Nowruz, in Tehran, Iran, Thursday, March 20, 2025. (Office of the Iranian Supreme Leader via AP)
Ella Osama Abu Dagga, 25 days old, lies in a van after being pulled from the rubble following an Israeli army airstrike that killed her parents and brother in Khan Younis, southern Gaza Strip, Thursday, March 20, 2025. (AP Photo/Mariam Dagga)
EDS NOTE GRAPHIC CONTENT.- Rescue workers and volunteers attempt to pull the body of a man from the rubble following an Israeli army airstrike in Khan Younis, southern Gaza Strip, Thursday, March 20, 2025. (AP Photo/Mariam Dagga)
Neighbours watch as volunteers and rescue workers search for survivors among the rubble of a building hit by an Israeli army airstrike in Khan Younis, southern Gaza Strip, Thursday, March 20, 2025. (AP Photo/Mariam Dagga)
Volunteers and rescue workers use a bulldozer as to remove the rubble of a building hit by an Israeli army airstrike in Khan Younis, southern Gaza Strip, Thursday, March 20, 2025. (AP Photo/Mariam Dagga)
Smoke rises from a location reportedly struck by U.S. airstrikes in Sanaa, Yemen, Wednesday, March 19, 2025. (AP Photo/Osamah Abdulrahman)
An Israeli tank maneuvers on the Gaza Strip border in southern Israel, Wednesday, March 19, 2025. (AP Photo/Ariel Schalit)
Smoke rises following an Israeli bombardment in the Gaza Strip, as seen from southern Israel, Wednesday, March 19, 2025. (AP Photo/Ariel Schalit)
Smoke rises from a location reportedly struck by U.S. airstrikes in Sanaa, Yemen, Wednesday, March 19, 2025. (AP Photo/Osamah Abdulrahman)
An Israeli tank takes position on the Gaza Strip border in southern Israel, Wednesday, March 19, 2025. (AP Photo/Ariel Schalit)
