US stocks and world gold prices both peaked

Each ounce of gold increased by nearly 50 USD and all three key Wall Street indexes reached their peak thanks to the Fed's interest rate decision.

The world price of gold for immediate delivery on March 20 set a new record, at one point touching 2,210 USD an ounce. The old record on March 8 was 2,195 USD.

Gold investors breathed a sigh of relief when after the policy meeting, the US Federal Reserve (Fed) still maintained its forecast of reducing interest rates three times this year. Gold prices are sensitive to interest rates, as this instrument does not pay fixed interest.

World gold prices skyrocketed on March 20. Chart: Goldprice

The Fed's decision yesterday created new buying pressure in the market. Prices jumped as investors began forecasting a Fed rate cut from June. CME FedWatch interest rate tracker shows the probability of a June rate cut is now 60%, up from just 50% before the press conference of the Fed.

The US stock market also prospered. Closing the trading session on March 20, the S&P 500 index increased 0.9%, setting a new peak at 5,224 points. DJIA increased 1% to a record of 39,511 points. Nasdaq Composite reached a historic peak at 16,369 points.

9 out of 11 industry groups in the S&P 500 index yesterday closed up. Among them, 5 groups increased by more than 1%. The non-essential consumer goods group increased the most with 1.5%.

US stocks soared towards the end of the session, as investors welcomed the Fed's policy decisions and economic forecasts. This agency keeps the reference interest rate unchanged and forecasts to still reduce interest rates 3 times this year. Before the meeting, many investors were worried that the Fed would cut interest rates less, due to recent inflation figures warming up.

"Accelerating inflation makes us worried. But Powell does not waver. Investors are relieved because the Fed still plans to reduce interest rates three times this year. This has pulled up the market and the appetite for risky assets." high," said David Russell - Director of Market Strategy at TradeStation.

Financial stocks went up after the Fed's decision, thanks to expectations that this year's interest rate reduction will help the US economy continue to grow. American Express shares rose 2.8%.

The group of technology giants also continues to lead the market as investors bet this group will benefit the most from falling interest rates. Alphabet, Amazon, Microsoft and Nvidia all rose more than 1%. Meta Platforms increased 1.9%. The strongest are Apple and Tesla with 1.5% and 2.5% respectively.