The U.S. stock market rose as the Federal Reserve cut interest rates to boost the job market, creating hope for more cuts in 2026. Wall Street responded positively, with the S&P 500 just shy of its all-time high and the Dow Jones up 1%.

Fed Chair Jerome Powell’s comments left room for future rate cuts, as the central bank faces a delicate balancing act between job market pressures and rising inflation. Interest rates are currently in a neutral position, allowing time for further assessment of economic data.

Fed officials project one more rate cut by the end of 2026, reflecting uncertainty about the economy’s need for lower rates. Despite inflation concerns, most officials supported the quarter-point cut, with expectations for additional cuts next year.

The bond market saw Treasury yields ease amid expectations for more rate cuts. Traders are now betting on a 71% chance of at least two rate cuts in 2026. The Fed also announced a program to buy shorter-term Treasurys to support financial system stability.

Stocks like GE Vernova and Palantir Technologies saw gains, while Cracker Barrel rose after reporting strong results but cutting revenue forecasts. GameStop, however, fell after weaker revenue numbers. Overall, the S&P 500, Dow Jones, and Nasdaq all closed higher.

Global stock markets were mixed, with modest movements in Europe and Asia. The Fed’s actions and future rate cut expectations continue to shape market dynamics.

Read more at Yahoo Finance: US stocks rise after the Fed cuts rates and hopes build for more