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(Reuters) - Wall Street rose on Wednesday after the Federal Reserve signaled potential cuts later this year, reassuring investors worried that the U.S.-China trade war could stall economic growth.
Saying it “will act as appropriate to sustain” economic expansion, the central bank signaled rate cuts of as much as half a percentage point over the remainder of 2019.
In its statement following a two-day policy meeting, the Fed held rates steady, as expected, but dropped a previous promise to be “patient” in adjusting rates.
“We think the Fed delivered. It did no harm. It walked right up to a cut without doing it today. It’ll likely be coming in July absent some big trade news or other news,” said John Augustine, chief investment officer at Huntington Bank in Columbus, Ohio.
Buoyed by growing confidence the Fed will cut rates, and by hopes of an end to the U.S.-China trade war, U.S. stocks have climbed in recent weeks. The S&P 500 has gained about 6% in June and is less than 1% away from its record high close set in April.
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