Share Prices Rise to New Heights with Rate Increase

US stocks rallied Wednesday after the Federal Reserve raised interest rates by a quarter of a percentage point. The move was widely expected, and the Fed signaled that “ongoing increases” to short-term rates “will be appropriate.”

But Wall Street seemed to take solace from the fact that inflation pressures are easing, which should allow the Fed to raise rates far more gradually than it did last year. This could mean good news for the stock market in the months to come as the Fed is able to continue to slowly raise rates without causing a major market correction.

owner Meta Platforms after the closing bell today. The stock was up nearly 3% yesterday and has rallied more than 25% so far this year.

The Dow was up marginally, the S&P 500 was up marginally and the Nasdaq Composite was up marginally as the markets closed today. Levels might still change slightly as the evening progresses.

The Federal Reserve raised rates again this week, continuing to stress that they have more to do to get inflation in check. This seems to indicate that more rate hikes are on the way, with no Fed pause just yet. And forget about rate cuts by the end of the year!

After the Federal Reserve’s latest moves, investors mostly cheered. The Dow was flat but the other two major market indexes were near their highest levels of the day in the last hour of trading, rebounding from losses earlier in the trading session. It looks like this is a market that just wants to keep climbing. Investor sentiment has improved dramatically in recent weeks. Stocks enjoyed a strong rally in January as a result.

Fed Chair Jerome Powell has had Covid for two weeks. So it seems like odd timing for the Fed to cut any reference to the pandemic from its policy statement for the first time in nearly three years.

Leave a Comment Cancel reply