Stock market indexes rose more than 1% on Wednesday morning, their best gain in nearly two weeks, as investors awaited the Fed’s rate announcement.
Indices are recovering from a wave of panic selling. The Nasdaq composite rose 1.7% and the S&P 500 gained 1.5%. Small-caps also joined in, with the Russell 2000 up 1.2%.
The Dow Jones Industrial Average rose 1.2% as half of its 30 components gained more than 1% in the first half hour of trading. Microsoft (MSFT) rose 1.5% in an attempt to recover from a one-year low. Coca-Cola (KO) bouncing from it 200-day moving average.
Volume was higher on the Nasdaq and lower on the NYSE compared to the same time on Tuesday. Gainers led the number of losers more than 6-1 on the NYSE and 4-1 on the Nasdaq.
Federal Reserve sets out to raise rates
The Federal Reserve concludes its meeting today at 2 p.m. ET with interest rate decision. Most market participants expect the Fed to raise lending rates by three-quarters of a point, which would biggest since 1994.
Overview of the US stock market today
|Table of contents||Icon||Price||Loss of profit||% Change|
|S&P 500||(0S & P5)||3789.76||+54.28||+1.45|
Last Updated: 10:08AM ET 6/15/2022
Futures markets showed half a point gain until Friday’s hotter-than-expected consumer inflation report changed the rate outlook. With today’s rate hike mostly a foregone conclusion, the stock market will be watching for comments from Fed Chairman Jerome Powell on what’s next. Is it possible to increase by 75 basis points?
When the Fed met this morning, the US Census Bureau reported that retail sales fell 0.3% in May. Excluding cars, May sales rose 0.7% and 0.1% excluding gasoline. All three measures miss the consensus Econoday estimates. Economists expect total sales to rise 0.1% after rising 0.7% in April.
Sal Guatieri, senior economist at BMO Capital Markets, said: “The onslaught of prices and interest rates coupled with a drop in confidence that overwhelmed US consumers in May, could be the start of the season. the beginning of a much tougher road ahead,” Sal Guatieri, senior economist at BMO Capital Markets, said in a note. “The weak sales report likely won’t affect the Fed, as it will need to see a prolonged period of weakness in domestic demand and the labor market likely occur before breathing relieved on the inflation front.”
The yield on the 10-year Treasury note fell 11 basis points to 3.37% after moving higher over the past three sessions.
ECB tests to protect weaker economies
In Europe, the European Central Bank announced plan to protect weaker euro zone countries from an increase in interest rates. The ECB is also fighting inflation by raising interest rates, but some countries like Italy face a larger burden because they are heavily indebted.
Germany’s DAX was up 1.5% in afternoon trading. Paris’s CAC 40 was up 1.2% and London’s FTSE 100 was up 1.4%.
IBD 50 ETF Creators (FFTY) increased by 0.6%.
Steel Dynamics led the IBD 50 with a 4% gain, extending a 200-day off-road rally. Other IBD 50 industrial stocks also performed well, including Commercial Metals (CMC), Alpha Metallurgical Resources (AMR) and coal producer Resources Ramaco (METC).
Nearly all of the 11 S&P industry indexes are higher, and most are above 1%. SPDR only for the energy select industry (XLE) decrease, and only slightly. US crude oil prices fell 0.6 percent to $118.25 a barrel.
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