The S&P 500 gained on Wednesday’s intraday turnaround as investors shrugged off a quarter-point rate hike from the Federal Reserve.
The S&P 500 rose 0.2% and the Nasdaq Composite rose 0.9%, boosted by gains at chipmakers following strong revenue from advanced microdevices. The Dow Jones Industrial Average was flat.
The central bank’s latest hike marks a drop from its half-point increase in December, prompting investors to hope the central bank eases its aggressive tightening campaign.
However, the central bank gave no real indication of suspending hikes, saying in its post-meeting statement that “continued increases in the target range would be appropriate to achieve a stance of monetary policy that is sufficiently accommodative to return inflation to 2 percent over time.”
Federal Reserve Chairman Jerome Powell told a press conference that the Fed needs to be reined in for some time and that the Fed has more work to do.
“I don’t see any signs yet that the Fed is open to rate cuts for 2023,” said Bill Sox, portfolio manager at Brandywine Global. “I don’t see that the Fed is trying for a soft landing. Although they won’t say so, they may like the restorative aspects of a recession and a perfect bear market.”
There have been some recent signs of easing inflation in the wider economy and the central bank acknowledged that, saying it had “declined somewhat, but remains elevated”.
The rankings received a boost as corporate earnings showed mostly resilient profits in the fourth quarter. Peloton Shares rose more than 17% after the fitness equipment company said Net loss decreased year-on-year. Advanced Micro Devices Shares gained more than 8% after the semiconductor company Reported fourth quarter earnings beat.
Wall Street is coming off a strong session at the end of January. The S&P 500 posted its best January performance since 2019, while the tech-heavy Nasdaq Composite had its strongest January in 22 years.
