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Nasdaq Has Biggest One-Day Jump Since 2020 After Fed Rate Hike, Powell Comments

Reuters

Last Updated: July 28, 2022, 07:43 IST

New Delhi, India

US stocks rallied on Wednesday

US stocks rallied on Wednesday

US stocks rallied on Wednesday and the Nasdaq posted its biggest daily percentage gain since April 2020

US stocks rallied on Wednesday and the Nasdaq posted its biggest daily percentage gain since April 2020 as the Federal Reserve raised interest rates as expected and comments by Fed Chairman Jerome Powell reassured investors. In addition, upbeat quarterly reports from Microsoft Corp and Alphabet Inc provided further encouragement about about the earnings season.

The S&P 500 closed at its highest level since June 8.

The Fed raised the benchmark overnight interest rate by three-quarters of a percentage point. The move came on top of a 75 basis points hike last month and smaller moves in May and March, in an effort by the Fed to cool inflation.

Powell said in a news conference following the rate announcement that he did not believe the U.S. economy is currently in a recession but that it is softening.

Powell also “didn’t automatically say we needed another rate hike," said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.

“It was a calming statement coming on the heels of a day where you saw some earnings and revenues that were better than expectations, albeit expectations that were very tempered."

The Dow Jones Industrial Average rose 436.05 points, or 1.37 per cent, to 32,197.59, the S&P 500 gained 102.56 points, or 2.62 per cent, to 4,023.61 and the Nasdaq Composite added 469.85 points, or 4.06 per cent, to 12,032.42.

Wednesday’s hike was also widely anticipated by investors.

“This was widely expected and encouraging that it was a unanimous decision," said Jack Ablin, chief investment officer and founding partner at Cresset Capital. “It was well telegraphed and properly balanced against expectations."

Microsoft rose 6.7 per cent after it forecast double-digit growth in revenue this fiscal year on demand for cloud computing services. Alphabet jumped 7.7 per cent, a day after it reported better-than-expected sales of Google search ads, easing worries about a slowing ad market.

Advancing issues outnumbered declining ones on the NYSE by a 5.27-to-1 ratio; on Nasdaq, a 3.15-to-1 ratio favored advancers.

The S&P 500 posted one new 52-week high and 30 new lows; the Nasdaq Composite recorded 50 new highs and 107 new lows.

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(This story has not been edited by News18 staff and is published from a syndicated news agency feed)
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first published:July 28, 2022, 07:12 IST
last updated:July 28, 2022, 07:43 IST
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