U.S. stocks climbed after the Federal Reserve cut interest rates by 25 basis points for the third straight time, as widely expected. Chairman Jerome Powell expressed optimism about economic growth, stating that the impact of tariffs on inflation is temporary.

The S&P 500 inched closer to its all-time high, while the Russell 2000 Index, tracking small-cap stocks, surged to a record peak.

Oracle shares plunged nearly 8% in after-hours trading after the company reported weaker-than-expected revenue for the fiscal quarter.

The Fed also announced plans to purchase $40 billion in Treasury bills monthly starting December 12 to replenish financial system reserves, a move expected to support liquidity in the overnight funding market.

At a press conference, Powell stated, "Further normalization of our policy stance should help stabilize the labor market, and once tariff effects fade, inflation should return to its downward trend toward 2%."

Krishna Guha, head of central bank strategy at Evercore ISI, noted that the rate cut leaned slightly hawkish overall, adding that Powell’s remarks on productivity and growth were "very risk-asset friendly."

The Fed’s dot-plot median projection suggests one rate cut in 2026, though traders are still pricing in two reductions.

President Donald Trump criticized the Fed for not cutting rates more aggressively and revealed plans to interview former Fed Governor Kevin Warsh for the chair position.

At the New York close: - The S&P 500 rose 0.67% to 6,886.68. - The Dow Jones Industrial Average gained 1.05% to 48,057.75. - The Nasdaq Composite advanced 0.33% to 23,654.15. - The Nasdaq 100 climbed 0.42%. - The Russell 2000 jumped 1.32%.