The S&P 500 Hits Record Highs on Fed Decision and Acquisition News

Key Takeaways:

• The S&P 500 added 0.9% on Wednesday, March 20, 2024, as the Federal Reserve held interest rates steady and maintained its forecast for three rate cuts this year.
• Paramount Global shares soared following reports that a private equity firm made an $11 billion bid for the company’s studio division.
• Shares of automakers pushed higher as the U.S. Department of Energy relaxed proposed rules intended to encourage the transition to electric vehicle (EV) production.

Major U.S. equities indexes jumped to all-time highs as the Federal Open Market Committee (FOMC) concluded its March meeting. The FOMC maintained interest rates at current levels in a move that was widely expected by market participants. Those looking for confirmation that lower rates remain on the horizon received good news as the Fed’s latest dot plot showed policymakers still anticipate three rate cuts in 2024.

S&P 500 Reaches New Heights

The S&P 500 advanced 0.9% on Wednesday after popping slightly as the Fed announced its policy decision and released its economic forecasts. The index closed above 5,200 for the first time in its history. The Nasdaq closed the session 1.3% higher, while the Dow was up 1.0%.

Paramount Global Acquisition Buzz

Shares of Paramount Global (PARA) led the way for the S&P 500, soaring 11.8% following reports that private equity firm Apollo Global Management offered $11 billion to purchase Paramount’s film and television studios. While the studio business has often been the subject of acquisition talks, Paramount Global’s controlling shareholder Shari Redstone and other board members have been reluctant to part with what they consider the strongest component of the company.

Automakers Benefit from Regulatory Relief

Automaker stocks moved higher after the U.S. Department of Energy softened proposed rules designed to encourage the transition to electric vehicles (EVs). The updated, less stringent proposal gives manufacturers more time to adjust to new fuel economy standards. Shares of Ford (F) were up 4.9%, while General Motors (GM) stock gained 3.2%.

Cruise Operators Set Sail

It was also a strong day for shares of cruise operators. Carnival Corp. (CCL) shares jumped 4.8% as the company prepares to release earnings results next week. Analysts anticipate year-over-year revenue and profit gains for Carnival. Royal Caribbean (RCL) shares added 4.7%, with optimism that its recently launched Icon of the Seas, now the world’s largest cruise ship, could bolster bookings and financial results.

Nasdaq Faces Selling Pressure

Shares of stock exchange operator Nasdaq (NDAQ) posted Wednesday’s heaviest losses among S&P 500 stocks, slipping 2.5%. The downturn came after Borse Dubai said it would sell $1.6 billion worth of Nasdaq shares, relinquishing its role as the company’s top shareholder.

Leadership Changes Impact Equinix

Amcor (AMCR) shares also fell 2.5% after the global packaging provider announced CEO Ron Delia will retire in April. Current Chief Commercial Officer Peter Konieczny will serve as interim CEO as the firm searches for a permanent successor. Shares of Equinix (EQIX) dropped 2.3% after short seller Hindenburg Research disclosed that it had taken a short position in the data center firm. According to Hindenburg, Equinix has manipulated accounting metrics and exaggerated its potential to benefit from a boom in artificial intelligence (AI) technology.

Overall, the market saw significant movements on Wednesday, with some companies reaching new highs while others faced challenges. Investors will be closely watching upcoming earnings reports and any further developments in the regulatory landscape that could impact various sectors.

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