Stocks fell Wednesday after the Federal Reserve announced a 0.5 point rate hike and promised future rate hikes.
The Dow Jones Industrial Average is down 160 points, or 0.5%. The S&P 500 is down 0.2%. Nasdaq Composite rose, boosted by a rise in chip makers following strong earnings from Advanced Micro Devices.
The Fed’s rate hikes represented a slowdown from December’s 0.5 percentage point hike, but investors still feared these rate hikes would lead the economy into recession. In a post-meeting statement, the central bank said, “Continued increases in the target range are appropriate to achieve a sufficiently restrictive monetary policy stance to bring inflation back to 2% over time. ” was retained.
Stocks hit session lows as Fed Chairman Jerome Powell said at a press conference that the Fed will need to ease regulations for some time and that the central bank has more to do. Stock prices then rebounded.
Those comments disappointed some investors who had hoped the Fed would hint at a possible moratorium on rate hikes. Some recent indicators of falling inflation across the economy show investors want an accommodative tone from his Fed chief.
“There are still no signs the Fed is willing to cut rates in 2023,” said Bill Zox, portfolio manager at Brandywine Global. Ginger may favor the recovering side of recessions and proper bear markets.”
Losses on Wednesday were subdued as fourth-quarter corporate earnings continued to show solid gains. Peloton fitness equipment company Net loss narrowed year-on-year. Advanced Micro Devices Shares rose more than 8% after semiconductor company outperformed fourth quarter earnings.
Wall Street is finishing a strong session through the end of January. The S&P 500 posted its best January performance since 2019, while the technology-focused Nasdaq Composite posted its best January performance in 22 years.