dow jones industrial average, federal reserve chair jerome powell
The Dow burst to a new all-time high on Wednesday ahead of the July 4 holiday, and Wall Street owes this parabolic stock market rally to the Fed. | Source: REUTERS / Jim Young

The Dow and broader U.S. stock market set new highs on Wednesday, as investors shrugged off geopolitical tensions ahead of Independence Day. While there was no immediate catalyst for the rally, the Federal Reserve’s dovish policy shift continues to offer fuel for the record-setting pump.

Dow Hits New Highs; S&P 500 Follows

All of Wall Street’s major indexes reported gains in the holiday-shortened session. The Dow Jones Industrial Average climbed 179.32 points, or 0.67%, to 26,966, a new record high.

Dow Jones
Dow Jones Industrial Average hits new all-time high following triple-digit rally. | Source: Yahoo Finance.

The broad S&P 500 Index of large-cap stocks advanced 0.8% to 2,995.61, which was also a record. All 11 primary sectors reported gains, with real estate and consumer staples rallying more than 1%.

The technology-focused Nasdaq Composite Index jumped 0.8% to a new all-time high of 8,170.23.

A measure of implied volatility known as the CBOE VIX held near two-month lows on Wednesday, which is a testament to the market’s recovery in the last six weeks. The so-called “fear index” reached a session low of 12.58 on a scale of 1-100 where 20-25 represents the historic average.

The Fed Factor

jerome powell, federal reserve rate cut, dow jones
You can thank the Fed for stock-market euphoria. | Source: Joshua Roberts / Getty Images / AFP

After a disastrous May, U.S. stocks have been on a fast track to recovery thanks in large part to the Federal Reserve. Chairman Jerome Powell got the party started last month when he said lower interest rates were on the table.

Those comments were echoed by other central bank officials and later reflected in the official June policy statement, which dropped the word “patient” from its forward guidance. Now, traders are pricing in a July interest rate cut with 100% certainty.

Signs of a slowing economy will give the Fed enough justification to slash interest rates following the July 30-31 FOMC meeting. Earlier this week, a pair of PMI reports confirmed that the U.S. manufacturing industry barely avoided contraction last month.

On Wednesday, the ADP Institute said private-sector employers added 102,000 workers to payrolls in June, a figure that was well below estimates.

The Department of Labor will release official employment numbers on Friday.

Click here for a real-time Dow Jones Industrial Average (DJIA) price chart.

You May Also Like

Spend Your $1,000 Wisely on Cyber Monday. Consider These 4 Stocks

The average consumer will spend $1,000 this holiday season. Don’t be average, consider making your money work for you with these stocks.

Deutsche Bank Reveals the Real Reason Stock Market Is at All-Time Highs (& Why It Can’t Continue)

The US stock market is at all-time highs, but what’s driving this ten-year bull market? It’s stock buybacks, according to Deutsche Bank.

Dow Futures Rocket but Warren Buffett’s $128 Billion Skips Overpriced Market

Dow Jones Industrial Average (DJIA) futures point to new stock market highs, so why is Warren Buffett reluctant to invest?

US Steel (NYSE:X) Needs More Than Trump Tariffs to End 2019 in the Green

US Steel (NYSE:X) rose swiftly after President Donald Trump announced the reimposition of tariffs on imports from Brazil and Argentina.

Growth Recession Chokes India as GDP Tumbles, and No One Seems to Care

India’s GDP growth fell to a six-year low in Q2, but the country’s government is in denial while the economy reels under a recession.

Dow Pops While Trump Trade War Hits Unsettling Milestone

The Dow kicked off December with a recovery, but stock market bulls must wrestle with an unsettling trade war milestone.