• The Dow Jones rallied around 300 points Wednesday.
• An ultra-dovish Federal Reserve is prepared to push for an inflationary overshoot to hit its macroeconomic targets.
• U.S. retail sales hint at a lurking threat to the Dow’s bull rally.

The Dow Jones rallied Wednesday as the Federal Reserve’s extraordinary commitment to boost inflation reassured investors that monetary policy will remain loose. No rate hikes are projected for at least three years as Jerome Powell looks to increase price pressure at all costs.

Dow Rallies s Federal Reserve Goes All-In on Inflation

Among the major U.S. stock market indices, the Dow Jones led the way, while the S&P 500 managed a meager gain and the Nasdaq slipped into negative territory.

The Federal Open Market Committee (FOMC) kept interest rates on hold Wednesday. The insistence on keeping rates low until 2023 dragged the dollar lower and helped send stock prices higher.

Driving for an inflationary “overshoot” is unusual for a central bank, and demonstrates Powell’s all-in approach to re-inflation . The Dow didn’t spike after the policy decision was announced–a sign investors were already pricing in the decision. Watch the video below:

Retail Sales Signal Risk to U.S. Recovery

Before the Federal Reserve, U.S. retail sales data had disappointed forecasts. Analysts were expecting growth of 1%, but the actual number came in at 0.6%.

ING economist James Knightley  has been tracking some of the more worrying trends in the U.S. economy since the pandemic began, and the latest retail data strengthened his cautious outlook.

In a recent report, Knightley outlined the major stumbling blocks:

The consumer has performed well so far given the health and economic impact from Covid, but there is still a long way to go in the recovery story. Given Covid is still not beaten we remain cautious about the growth outlook. Moreover, there is still huge unemployment, there is little prospect of meaningful fiscal stimulus in the next few months and there is the clear threat that a fractious election could hurt sentiment and spending.

Hopes of some meaningful stimulus from Congress continues to be a hot topic on Wall Street, and Wednesday was no different. With a chasm between Republicans and Democrats, hope sprung on Tuesday when a bipartisan coalition laid out a middle of the road $1.5 trillion bill.

With Donald Trump suggesting he could get behind a bill , momentum could be building. White House Chief of Staff Mark Meadows signaled he was still “optimistic for a deal.”

Dow 30 Stocks: Apple Struggles, Chevron Leads as Oil Surges

It was a mixed but generally positive day for the Dow 30 , as a surging crude price helped lift Chevron to a 3% rally. Touching above $40 a barrel, crude enjoyed a larger than anticipated draw in U.S. inventories of more than 4 million barrels against expectations of a slight build.

After a strong day on Tuesday, Apple stock tumbled 1% as investors digested outcomes from its latest product showcase.

Boeing stock provided some sturdy support for the Dow Jones, as it managed a rally of 2.5% despite extremely negative safety reports in a recent Congressional review.