The Dow Jones Industrial Average jumped to a record Wednesday as the Federal Reserve signaled it would cut rates several times next year, satisfying investors who hoped the central bank would finally start to acknowledge the slowing trend of inflation with a less-aggressive monetary stance.

The 30-stock Dow added 512.30 points, or 1.40%, to close at 37,090.24. This marks the first time the benchmark closed above the 37,000 mark — exceeding a previous record set in January 2022. At its session high, the Dow touched 37,094.85.

The S&P 500 jumped 1.37% to finish the session at 4,707.09 — crossing 4,700 for the first time since January 2022 — while the Nasdaq Composite climbed 1.38%. to 14,733.96. All three major averages hit fresh 52-week highs.

The central bank held the benchmark overnight borrowing rate steady in the 5.25% to 5.5% range as expected, but more importantly it forecast three rate cuts in 2024, which were more than it had previously indicated. Investors have been increasingly hoping for the Fed to give a clearer signal that it would start cutting rates next year with recent inflation data easing.

The Fed’s meeting statement acknowledged that inflation “has eased” over the past year and the central bank formally lowered its inflation forecast for 2024, seeing a 2.4% rate down from 2.6%.

“The Fed has given the market an early holiday gift today when, finally, for the first time, they have commented positively about inflation,” said Gina Bolvin, president of Bolvin Wealth Management Group. “It appears that the Fed is moving in the market’s direction, rather than the market moving towards the Fed. The Santa Claus rally may continue.”

Read Related Also: Prince Harry is ordered to pay publisher of the Mail almost £50,000 after he lost latest stage of legal battle

The Dow retreated from previous record levels in early 2022 as the Fed embarked on its policy tightening campaign to fend off inflation. Last year, the 30-stock benchmark dropped 8.8% — its biggest annual decline since 2008.

Since the start of the fourth quarter however, the Dow has surged more than 10% as hope of easier policy grew.

The gains Wednesday brought the Dow’s year-to-date rise to 11.9%. The broader market has seen even bigger gains, with the S&P 500 up 22.6% so far in 2023. The Nasdaq Composite is up 40.8% year-to-date.

The market got more encouraging inflation data earlier on Monday, with the producer price index unchanged in November. That follows Tuesday’s consumer price index release, which showed prices slowing to a 3.1% annual rate last month.

The 10-year Treasury yield, a benchmark for mortgage rates and other loans, dropped to 4.03% following the Fed’s rate forecast release, the lowest levels since August.

Shares of Bank of America and Wells Fargo, banks that stand to benefit if the Fed orchestrates a so-called soft landing, jumped 4% and nearly 3% Wednesday, respectively. Home Depot, whose sales could be boosted by a revival in the housing market, gained 3%.