Stocks on Wall Street closed solidly higher Wednesday after the Federal Reserve ratcheted up its campaign against surging inflation by raising its key interest rate three-quarters of a point. The Fed’s latest hike lifts the benchmark short-term rate to its highest level since 2018. The S&P 500 rose 102.53 points, or 2.6%, to 4,023.61. The tech-heavy Nasdaq jumped by the most in over two years, rising 469.85 points, or 4.1%, to 12,032.42. The Dow Jones Industrial Average rose 436.05 points, or 1.4%, to 32,197.59. Strong earnings from Google’s owner Alphabet, Microsoft ,and other companies helped lift investors’ mood, the AP reports.
The central bank’s decision comes as inflation has accelerated to 9.1%, the fastest annual pace in 41 years. "I do not think the US is currently in a recession,” Chair Jerome Powell said Wednesday at a news conference in which he suggested that the Fed's rate hikes have already had some success in slowing the economy and possibly easing inflationary pressures. His remarks helped ignite the Wall Street rally, per the AP.
Shares in Microsoft and Alphabet rose 6.7% and 7.9%, respectively, after their latest quarterly reports. Retailers, restaurant chains, and other companies that rely on direct consumer spending also helped lift the market. Chipotle Mexican Grill jumped 14.7% after the restaurant chain reported second-quarter earnings that beat analysts’ forecasts. Spotify Technology vaulted 12.2% after the music streaming service reported monthly active user and premium subscriber numbers that exceeded the Street’s expectations.
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