Wall Street rises closer to its all-time high after the Fed cuts rates, as expected

Wall Street loves lower interest rates because they can boost the economy and goose prices for investments, even if they also can worsen inflation. The market reacted only modestly to Wednesday's cut because stock prices had already run toward their records on the widespread assumption that exactly such a move was coming.

The bigger question remains how many more cuts may be in store for 2026 from the Fed to bolster a slowing job market.

After voting on Wednesday's cut of a quarter of a percentage point, Fed officials released projections for where they see the federal funds rate ending 2026. The median member is penciling in one more cut by the end of next year, the same as three months earlier.

That projection is under the microscope because Fed officials had seemed unusually split about how much more help the economy may need from lower interest rates. With inflation remaining stubbornly above the Fed’s 2% target, some officials had been saying it was the bigger threat for the economy rather than the job market.

In Wednesday's vote, two Fed officials voted against the cut of a quarter percentage point because they saw no need to reduce rates now. Another official, meanwhile, voted against Wednesday's cut because he wanted a deeper reduction of half a percentage point.

In the bond market, the yield on the 10-year Treasury edged down to 4.16% from 4.18% late Tuesday. The two-year yield, which more closely tracks expectations for the Fed, fell more and slipped to 3.56% from 3.61%.

On Wall Street, GE Vernova flew 15.4% higher after the energy company raised its forecast for revenue by 2028, doubled its dividend and increased its program to buy back its own stock.

Palantir Technologies added 3.9% after saying the U.S. Navy will use its artificial-intelligence technology as part of a $448 million program.

Cracker Barrel Old Country Store rose 4% after swinging between gains and losses. The restaurant chain caught up in a furor around its logo design reported better results for the latest quarter than analysts expected but also cut its forecast for revenue this fiscal year, as well as for an underlying measure of earnings.

On the losing end of Wall Street was GameStop, which fell 3.7% after reporting weaker revenue for the latest quarter than analysts expected. The video-game retailers’ profit topped forecasts, though.

In stock markets abroad, indexes were mixed amid mostly modest movements across Europe and Asia.

AP Business Writers Yuri Kageyama and Matt Ott contributed.