Wall Street jumped after the U.S. Federal Reserve concluded its monetary policy meeting on Wednesday by hiking its key policy rate by 25 basis points, as widely expected.
The three major U.S. stock indexes, which were mostly languid prior to the Fed announcement, moved higher in the immediate aftermath as investors digested the hike and the accompanying statement.
In that
statement , the members of the Federal Open Markets Committee (FOMC) said some additional tightening might be possible, but suggested it was on the verge of pausing future hikes in view of recent turmoil in the financial sector.
Market participants will scrutinize Chairman Jerome Powell's
remarks and Q&A session, expected to get underway at 2:30 p.m.
ET (1830 GMT), for further clues regarding the central bank's
view of inflation, economic health, and stability in the banking
sector.
Worries persist that the central bank's aggressive battle
against inflation could tip the economy into recession, and
recent turmoil in the banking sector, sparked by failures of SVB
Financial Group and Signature Bank , have
exacerbated those fears.
"Despite the Fed pressing ahead with a 25 bps rate hike today, we see considerable uncertainty in the path ahead and would downplay the significance of updated economic and dot plot projections in such a fast-moving environment," said Ashish Shah, chief investment officer of Goldman Sachs’ Public Investing Business in New York. At 2:08 p.m. ET (1808 GMT), the Dow Jones Industrial Average rose 46.39 points, or 0.14%, to 32,606.99, the S&P 500 gained 14.75 points, or 0.37%, to 4,017.62 and the Nasdaq Composite added 83.94 points, or 0.71%, to 11,944.05. (Reporting by Stephen Culp in New York; Additional reporting by Amruta Khandekar and Shubham Batra in Bengaluru; Editing by Marguerita Choy)
