The S&P 500 approached a record high on Wednesday after the Federal Reserve signaled potential interest cuts later this year, reassuring Wall Street that concerns that the U.S.-China trade war could stall economic growth may be unfounded.

Saying it “will act as appropriate to sustain” economic expansion, the central bank signaled rate cuts of as much as half a percentage point over the remainder of 2019.

In its statement following a two-day policy meeting, the Fed held rates steady, as expected, but dropped a previous promise to be “patient” in adjusting rates.

That elevated the S&P 500 and Dow Jones Industrial Average to less than 1% from their record high closes set in late April.

Buoyed by growing confidence the Fed will cut rates, and by hopes of an end to the U.S.-China trade war, the S&P 500 has gained 6% in June.

The financial sector fell 0.2%, with bank stocks dipping 0.2%. Lower interest rates tend to hurt banks’ profits.

Contributing more than any other stock to advances on the Nasdaq and S&P 500, Adobe rose 5.2% after the company exceeded consensus estimates for quarterly earnings and revenue.

Facebook fell 0.5% as its ambitious plan to launch a digital currency faced a backlash from regulators and politicians in the United States and abroad.

The healthcare sector rose 1%, helped by gains in UnitedHealth, Pfizer and Allergan.

Allergan was up 6.2% after the company indicated that its constipation drug, jointly developed with Ironwood Pharmaceuticals, improved symptoms in patients suffering from irritable bowel syndrome with constipation.

Approximately 6.5 billion shares changed hands on the major domestic equity exchanges, as compared to the 6.8 billion share average over the past 20 trading days.

Are Interest Rate Reductions Coming?

The Fed on Wednesday indicated it might reduce interest rates by as much as half a percentage point over the remainder of this year in response to increased economic uncertainty and a decline in expected inflation.

The Fed, which held rates steady after the end of its latest two-day policy meeting, dropped a promise to be “patient” in adjusting rates and said it “will act as appropriate to sustain” a nearly 10-year economic expansion.

Nearly half of the Fed’s 17 policymakers now show a willingness to lower borrowing costs over the next six months, and Fed Chairman Jerome Powell said that even those who do not see a rate cut as the likeliest outcome “agree the case for additional accommodation had strengthened” since the last policy meeting in May.

Though the baseline outlook remains “favorable,” Powell said, risks continue to rise, including the drag that rising trade tensions may have on U.S. business investment and signs that economic growth is slowing overseas.

“Ultimately the question we are going to be asking ourselves is, ‘are these risks going to be continuing to weigh on the outlook?’” Powell said in a press conference after the release of the Fed’s policy statement and fresh economic projections.

“We will act as needed, including promptly if that’s appropriate, and use our tools to sustain the expansion,” he said, adding that if the Fed does ease monetary policy by cutting interest rates, it may also halt a gradual slimming of its massive balance sheet.

Expectations that the Fed would be cutting rates before long sent the yield on 2-year notes, often a proxy for Fed policy, to the lowest in a year and a half at around 1.75%. The gap between those and the yields on 10-year notes widened by the most in 16 months.

The new economic projections showed policymakers’ views of growth and unemployment were largely unchanged from March. But they now project headline inflation to be just 1.5% for the year, down from the previous projection of 1.8%.

They also expect to miss their 2% inflation target next year as well, a blow for a central bank that has missed that goal for years.

Policymakers “expressed concerns” about the pace of inflation’s return to 2%, Powell said, omitting his characterization after the Fed’s last meeting of low inflation as “transient.”

Wages are rising, he said, “but not at a pace that would provide much upward impetus” to inflation.

Seven of 17 policymakers said they expected it would be appropriate to cut rates by half a percentage point by the end of 2019, and an eighth saw a rate cut of a quarter point as appropriate.

That was not enough to change the median outlook for the Fed’s targeted overnight lending rate, which officials projected to remain in a range of between 2.25% and 2.50% for the rest of this year.

Only one committee member continues to see a rate hike as likely in 2019.

The long-run federal funds rate, a barometer for the state of the economy over the long term, was cut to 2.50% from 2.80%.

St. Louis Fed President James Bullard, who had argued that rates should be cut, dissented in Wednesday’s policy decision.

Possible Cap on H-1B Visas

The United States has told India it is considering caps on H-1B work visas for nations that force foreign companies to store data locally, three sources with knowledge of the matter told Reuters, widening the two countries’ row over tariffs and trade.

The plan to restrict the popular H-1B visa program, under which skilled foreign workers are brought to the United States each year, comes days ahead of U.S. Secretary of State Mike Pompeo’s visit to New Delhi.

India, which has upset firms such as Mastercard and irked the U.S. government with stringent new rules on data storage, is the largest recipient of these temporary visas, most of them to workers at big Indian technology firms.

The warning comes as trade tensions between the United States and India have resulted in tit-for-tat tariff actions in recent weeks. From Sunday, India imposed higher tariffs on some U.S. goods, days after Washington withdrew a key trade privilege for New Delhi.

Two senior Indian government officials said on Wednesday they were briefed last week on a U.S. government plan to cap H-1B visas issued each year to Indians at between 10% and 15% of the annual quota.

There is no current country-specific limit on the 85,000 H-1B work visas granted each year and an estimated 70% go to Indians.

Both officials said they were told the plan was linked to the global push for “data localization”, in which a country places restriction on data as a way to gain better control over it and potentially curb the power of international companies. U.S. firms have lobbied hard against data localization rules around the world.

Most-affected by any such caps would be India’s more than $150 billion IT sector, led by Tata Consultancy Services and Infosys Ltd, which uses H-1B visas to fly engineers and developers to service clients in the United States, their biggest market.

Since last year, the U.S. administration has been upset that U.S. firms such as Mastercard and Visa suffer due to regulations in several countries that it says are protectionist and increasingly require companies to store more data locally.

India last year mandated foreign firms to store their payments data “only in India” for supervision, and New Delhi is working on a broad data protection law that would impose strict rules for local processing of data it considers sensitive.

While governments the world over have been announcing stricter data storage rules to better access data in their jurisdictions, critics say restricting cross-border data flows hurts innovation and raises companies’ costs.