Dow hits record high as investors cheer Fed outlook on interest rates

$Tesla(TSLA.US)$ The article reported that Dow Jones Industrial Average surged to close at more than 37,000 points for the first time as investors applauded a statement from the Federal Reserve on Wednesday that it could cut its benchmark interest rate next year.

According to Yahoo Finance, investors traded Tesla's stock up by almost 5%, a figure much higher than the S&P 500 index's 0.3% bump on the day.

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"The Fed decision was more dovish than anticipated on a variety of fronts, including the acknowledgement that growth and inflation have both cooled, the strong signals that rate hikes are finished, and Powell's admission during the press conference that 'rates are at or near their peak,'" analyst Adam Crisafulli of Vital Knowledge said in a report.

Lower interest rates curb borrowing costs for consumers and businesses, boosting spending and broader economic growth. Interest rate cuts also tend to buoy riskier assets, including stocks. Markets have steadily pushed higher since October as Wall Street bet that the Fed, which hiked rates 11 times during the latest tightening cycle to their highest level in 22 years — will pivot to cuts in 2024.