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The stock market had its best day since 2020 after Federal Reserve Chairman Jerome Powell indicated that the Federal Open Market Committee wasn't considering large rate hikes in the future.
Powell made the comments after the Fed raised interest rates by 0.5% and announced a plan to wind down its $9 trillion balance sheet.
"So a 75-basis-point increase is not something that committee is actively considering," Powell said. "I think expectations are that we'll start to see inflation, you know, flattening out."
The markets responded positively to the news, with the Dow Jones Industrial Average surging by 932 points to close the day at 34,061. The S&P 500 was up by 124 points, finishing the day at 4,300. Both the Dow and S&P 500 had their best days since 2020.
The Nasdaq rose by 401 points, closing at 12,964.
Investors were relieved that the Federal Reserve wasn't going to aggressively try to combat rising inflation. While the 50-basis point increase was expected, many were concerned the Fed was going to seek higher rate increases during its next meeting in June.
"I think the market is starting to say, 'OK. We've got this pretty well priced in.' I don't think there's a lot of surprises out there. We've taken a lot of the fluff out of the market. We've taken a lot of the hot air out of the market," former Goldman Sachs President Gary Cohn told CNBC's Closing Bell. "We've now got some real value."