U.S. stocks rallied Wednesday, with the tech-heavy Nasdaq Composite posting its biggest daily percentage gain since April 2020, after the Federal Reserve raised its benchmark interest rate by another 0.75 percentage point to combat hotter-than-expected inflation.
- The Dow jumped+436.05 or +1.37%
- The S&P 500 gained+102.56or +2.62%
- The Nasdaq finished with a gain of+469.85 or +4.06%
U.S. stocks rallied on Wednesday afternoon as Fed Chairman Jerome Powell said the central bank left the door open for an “unusually large increase” at its next meeting in September, but it would likely need to slow the pace of rate increases at some point.
Fed officials on Wednesday raised the target range for the federal funds rate to 2.25% – 2.5%. It was the second 75 basis point rate hike in a row and the fourth interest rate increase this year.
Many Wall Street economists expected the 75 basis points hike after the June inflation data came in hotter-than-expected. Markets also hoped Powell could address recession concerns and explain how economic data shaped the Fed’s decision.
In U.S. economic data Wednesday, durable-goods orders jumped 1.9% in June. That was largely due to more bookings for new cars and trucks, but there were hints of weakness among other manufacturers. Economists polled by the Wall Street Journal had forecast a 0.4% decline in new orders for products meant to last at least three years.
Meanwhile investors are digesting second quarter earnings reports. More than 150 S&P 500 companies have reported calendar second-quarter earnings thus far. Of those names, roughly 70% have beaten analyst expectations, FactSet data shows.
The rally Wednesday was led by tech stocks with the Nasdaq 100 outperforming after reassuring results from Alphabet, Microsoft and Texas Instruments
Alphabet and Microsoft each missed earnings expectations in their reports Tuesday night, though shares of both were up as they both posted quarterly revenue growth. Among the wave of companies reporting results on Wednesday are plane maker Boeing and, after the market close, Facebook parent company Meta Platforms……..[read more]
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