S&P sets new record as Dow briefly erases 2020 losses

Stock markets continued a winning streak on Thursday following a significant shift in policy from the Federal Reserve.

The S&P 500 rose 6 points, or 0.2 percent, to close at a record 3,485. It surpassed 3,500 for the first time in midday trading.

After briefly erasing its 2020 losses during midday trading, the Dow Jones Industrial Average closed with a gain of 160 points, or 0.6 percent. The index remains several percentage points below its February high.

The tech-heavy NASDAQ, on the other hand, sank into the red in the final minutes before closing, losing 40 points, or 0.3 percent.

Federal Reserve Chair Jerome Powell on Thursday announced a significant shift in the central bank’s inflation targeting policy.

The new policy of targeting average inflation over time could open the door to extended periods of low interest rates and cheap borrowing, a boon for equity markets.

The stock rally continues despite ongoing economic pain in the real economy. Initial unemployment claims on Thursday came in at over 1 million. Initial claims only dipped below that unprecedented level once in the past 23 weeks.