Market Snapshot: Dow advances over 300 points after the Fed delivers 4th consecutive 75-bp rate hike but signals slowdown in the pace of increases

by | Nov 2, 2022 | Stock Market

U.S. stock indexes traded higher on Wednesday afternoon after the Federal Reserve announced the fourth straight jumbo increase in its benchmark interest rate and hinted at a potential slowdown in its effort to tighten monetary policy to bring down inflation.How are stock indexes trading
The Dow Jones Industrial Average
DJIA,
-0.31%
went up 308 points, or 0.9%, to around 32,952.

The S&P 500
SPX,
-0.94%
 rose 24 points, or 0.6% to 3,877.

The Nasdaq Composite was up 39 points, or 0.4% to 10,931.

On Tuesday, the Dow Jones Industrial Average fell 80 points, or 0.24%, to 32653, the S&P 500 declined 16 points, or 0.41%, to 3856, and the Nasdaq Composite dropped 97 points, or 0.89%, to 10891. The Nasdaq Composite is up 5.5% from its 2022 closing low, but remains down 30.4% for the year to date.

What’s driving markets The Federal Reserve on Wednesday approved the fourth straight jumbo increase in its benchmark interest rate, extending a rapid pace of hikes that brings the rate to the highest level in 15 years. For the first time, the central bank also signaled it would watch closely whether this rapid pace might eventually damage the economy with a “lag.” By a unanimous vote, the Fed hiked its rate by 0.75 percentage points to a range of 3.75% to 4%.  See: Fed approves another jumbo interest-rate hike, adds dovish language on way forward Movement in the expected trajectory of borrowing costs have been a major driver of stocks in 2022. In its battle to combat inflation running at 40-year highs, the Fed has raised interest rates from zero in February to a range of 3% to 3.25%, a tightening of liquidity that dragged the S&P 500 index down 19.1% for the year to date. See also: Live Markets Coverage

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