US stocks closed higher after the Federal Reserve on Wednesday announced an expected interest rate hike, the biggest since 2000.
Issuers were initially volatile after the announcement. The indices then stabilized and rose more than 2.5%, following Fed Chairman Jerome Powell’s press conference.
The Federal Reserve on Wednesday raised its benchmark interest rate by half a percentage point and said it would start cutting the central bank’s $9 trillion asset portfolio next month in an effort to curb inflation.
“It’s clear the Fed understands the need to contain price rises,” said Greg Bassuk, chief executive of AXS Investments.
Investors were watching Powell’s news conference for new clues about how far and how fast the central bank is willing to go in its effort to reduce inflation that has been rising for decades.
The S&P 500 gained 2.99% to 4,300.17 points, while the NASDAQ Composite rose 3.19% to 12,964.86 points and the Dow Jones Industrial Average rose 2.81% to 34,061.06 points.
Concerns about the impact on economic growth due to the Fed’s stance, mixed earnings from some big growth companies, the conflict in Ukraine, and pandemic-related lockdowns in China have hit the NYSE recently. , and growth stocks have carried most of the selling.
Shares of chipmaker AMD gained 9.10% at $99.42 apiece, after beating estimates for revenue and earnings in the latest quarter. Its sales are up 71% even as analysts worry about the PC slowdown.
Other winners were Airbnb (7.71%), after raising their revenue forecasts for the second quarter and reducing their losses in the first, and Starbucks (9.83%) after a good report.
Coronavirus vaccine maker Moderna gained 5.81% to $155.05. The laboratory announced a larger than expected quarterly profit, with sales of 5.930 million dollars of its only product.
In Mexico, the S&P/BMV IPC, the main index of the Mexican Stock Exchange, rose 0.72% to 51,432.63 units, and the FTSE-BIVA, of the Institutional Stock Exchange also gained 0.72% to 1,065.52 integers.