Wall Street closed sharply higher after the Federal Reserve raised interest rates, says Powell

NEW YORK (Reuters) – US stocks rebounded on Wednesday, led by the Nasdaq, after the Federal Reserve raised its benchmark overnight interest rate by three-quarters of a percentage point and comments from Federal Reserve Chairman Jerome Powell reassured investors.

The news added to the gains from upbeat quarterly reports from Microsoft Corp and Alphabet Inc that lifted sentiment regarding earnings season.

Powell said at a press conference following the Fed’s announcement that he does not believe that the US economy is currently in a recession but is in decline. Read more

He also said that the lack of a clear view of the future of the economy means that the US central bank can provide reliable guidance on the direction of its policy only on a “meeting-by-meeting” basis.

“Powell’s willingness to let the data drive it forward was something that pleased the market. He didn’t automatically say we needed another price hike,” said Peter Toze, chairman of Chase Investments in Charlottesville, Virginia.

“It was a quiet statement that came on the heels of a day when I saw some earnings and returns that were better than expected, despite expectations that were very moderate.”

The Fed’s action comes on top of a 75 basis point hike last month and smaller moves in May and March, in an effort by the Fed to cool inflation. Read more

According to preliminary data, the S&P 500 . index (.SPX) Gained 102.27 points, or 2.58%, to close at 4023.32 points, while the Nasdaq Composite Index. (nineteenth) It rose 465.28 points, or 4.02%, to 12,027.86 points. Dow Jones Industrial Average (.DJI) It rose 432.05 points, or 1.37%, to 32,196.00 points.

Investors had widely expected an increase on Wednesday.

“This was widely expected and encouraging that it was a unanimous decision,” said Jack Applin, chief investment officer and co-founder at Cresset Capital. “It was telegraphed well and properly balanced with expectations.”

Microsoft (MSFT.O) Expect double-digit revenue growth this fiscal year based on demand for cloud computing services. the alphabet (GOOGL.O) It reported better-than-expected sales of Google search ads, which eased concerns about a slowing ad market. Read more

Additional reporting by Shriachi Sanyal, Sruthi Shankar and Aniruda Ghosh in Bengaluru and Sinead Karo in New York. Editing by Sriraj Kalovila, Anil de Silva and Jonathan Otis

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