Stocks soared higher on Wednesday, with the Dow Jones Industrial Average closing above 37,000 for the first time ever, as market participants were encouraged by the Federal Reserve signaling that there may be several rate cut next year. The 30-stock index rallied over 500 points, while the S&P 500 Index and Nasdaq Composite added about 1.4% each.

Here's how the market settled on Wednesday:

S&P 500 Index (SPY  ): +1.37% or +63.39 points to 4,707.09

Dow Jones Industrial Average (DIA  ): +1.40% or +512.30 points to 37,090.24

Nasdaq Composite Index (QQQ  ): +1.38% or +200.57 points to 14,733.96

Driving market moves, the central bank held the federal funds rate within the range of 5.25% to 5.5%, a decision that was broadly expected by investors. Moveover, policymakers forecasted three rate cuts in 2024, more than they had previously indicated, as inflation "has eased" over the past year, according to the Fed's statement. The central bank also lowested its inflation forecast for next year to 2.4% from 2.6%.

"Recent indicators suggest that growth of economic activity has slowed from its strong pace in the third quarter. Job gains have moderated since earlier in the year but remain strong, and the unemployment rate has remained low," the Fed said in a statement. "Inflation has eased over the past year but remains elevated."

Fed Chair Jerome Powell noted that easing inflation without a significant increase in unemployment is "very good news," in his post-meeting statement on Wednesday. Powell also asserted that the Fed is willing to cut interest rates even if the U.S. economy does not enter a recession next year, added that "it could just be a sign that the economy is normalizing and doesn't need the tight policy."

Elsewhere, November's producer price index reading came in unchanged on Wednesday, according to the Labor Department's report, marking another positive sign inflationary pressures are easing across the U.S. economy. Excluding food and energy prices, core PPI was also flat month-to-month, while excluding food, energy and trade services saw PPI increasing 0.1%. Annually, headline PPI rose 0.9% in November, while core PPI increased 2.5%.

In single-stock news, Pfizer (PFE  ) shares came under pressure after the pharmaceutical giant issued disappointing guidance for 2024, expecting revenue between $58.5 billion and $61.5 billion. The company also expects to garner about $8 billion in revenue for its COVID vaccine and treatment next year.

Tesla (TSLA  ) shares were also impacted on Wednesday on news the electric vehicle maker is recalling more than 2 million cars to correct a defect in its Autopilot feature. "In certain circumstances when Autosteer is engaged, the prominence and scope of the feature's controls may not be sufficient to prevent driver misuse," the recall notice stated. The recall impacts the 2012-2023 Model S, 2016-2023 Model X, 2017-2023 Model 3 and 2020-2023 Model Y.

For Thursday, investors will react to U.S. retail sales for November for a peak of the health of the U.S. consumer in the first half of the holiday shopping season, alongside Adobe's (ADBE  ) quarterly earnings report.