The Dow Jones Industrial Average hit its first record closing high since January 2022, and the S&P 500 and Nasdaq rallied more than 1% each on Wednesday after the Federal Reserve signaled that its interest rate-hiking policy is at an end and that it sees lower borrowing costs in 2024.

In its policystatement, the Fed also left interest rates steady, as expected, and a near-unanimous 17 of 19 Fed officials projected that the policy rate will be lower by the end of 2024.

Indexes were flat ahead of the announcement and quickly gained ground after the news.

Stockssharply extended gains as Fed ChairJerome Powellsaid during a press conference that the Fed is “not likely” to hike further and that the Fed is “very focused on not making the mistake of keeping rates too high for too long.”

The Fed since March 2022 has raised its policy rate by 525 basis points in an effort to curb inflation.

“The statement is telling us that the Fed is seeing what the markets have already started to discount, that you’re going to have inflation back to normal without a recession,” said Tom Martin, senior portfolio manager at Globalt Investments in Atlanta.

“We kind of hoped it was going to be this, but we didn’t really think it was.”

The blue-chip index’sfirst all-time highin nearly two years confirmed that it has been in a bull market since tumbling more than 20% through its closing low in September 2022, according to a common definition.

The day’s rally was broad-based with all major S&P 500 sectors ending higher. The rate-sensitive S&P 500 real estateand utilitiessectors rose more than 3% each, leading sector gains. The small-cap Russell 2000 indexshot up 3.5%.

The Dow Jones Industrial Averagesurged 512.30 points, or 1.4%, to 37,090.24, while the Nasdaq and S&P 500each rose 1.4%.

The S&P 500 and Nasdaq hit fresh closing highs for the year. The S&P 500 is now up 22.6% for the year to date, while the Nasdaq is up 40.7% in that period and the Dow is up 11.9%.

Stocks have been rising for weeks on the view that the Fed is likely done hiking rates and will shift to rate cuts next year.

Following the Fed statement, interest rate futures raised the odds of a May rate cut to 90% versus 80% just before the announcement, according to LSEG’sFedwatch.

Earlier in the day,data showed producer prices were unexpectedly unchanged in November amid cheaper energy goods. In a report on Tuesday, US consumer prices unexpectedly rose in November as a decline in the cost of gasoline was more than offset by increases in rents.

Bucking the day’s trend, shares of Pfizerdropped 6.7% after the drugmaker forecast 2024 revenue below Wall Street’s expectations.

Volume on US exchanges was 14.35 billion shares, compared with the 11.04 billion average for the full session over the last 20 trading days.