S&P 500 hits new high as traders welcome latest Fed rate cut

Stocks closed broadly higher on Wall Street Wednesday, sending the S&P 500 to a record high for the second time this week, as investors welcomed the Federal Reserve's decision to lower interest rates for the third time this year.

The central bank also indicated that it won't cut rates again in the coming months unless the economic outlook worsens. The Fed has been using its power to cut short-term interest rates in a bid to shore up the economy amid the costly impact from the U.S.-China trade war.

With its latest rate cut, the Fed has nearly reversed the four rate hikes that it made in 2018.

Stocks wobbled shortly after the Fed's midafternoon announcement, which had been widely anticipated, then rallied.

"The rate cut was expected and also the market had been expecting a change in the language regarding another rate cut this year," said Quincy Krosby, chief market strategist at Prudential Financial. "The Fed just basically upped the bar for another rate cut by suggesting that the economy is in a good place."

The S&P 500 index rose 9.88 points, or 0.3%, to 3,046.77. The benchmark index also hit record high on Monday. 

The Dow Jones Industrial Average gained 115.27, or 0.4%, to 27,186.69.

The Nasdaq composite added 27.12 points, or 0.3%, to 8,303.98.