The Dow Jones Industrial Average closed up nearly 500 points on Wednesday (March 16) following the Federal Reserve raised interest rates as expected. It has also signaled that it will raise interest rates once more this year to curb inflation. The market has also been boosted by progress in peace talks between Russia and Ukraine.
The Dow Jones Industrial Average closed at 34,063.10, up 518.76, or +1.55%, the S&P500 closed at 4,357.86, up 95.41, or +2.24%, and the Nasdaq closed at 13,436.55, up 487.93, or +3.77%.
The Fed’s board voted to raise the short-term interest rate by 0.25% to 0.25-0.50% at its meeting yesterday. which is in line with market expectations The Fed stated that The war in Ukraine and the COVID-19 epidemic has created uncertainty for the US economy. which in the near term Such factors tend to increase inflationary pressures and weigh on the economy.
The Fed said raising its short-term interest rate target was appropriate to curb inflation, which has hit a 40-year high, while raised its inflation forecast for this year to 4.3 percent and adjusted it. Increase inflation forecasts for 2023-2024 to 2.7% and 2.3%, respectively.
In addition, Fed officials predicted that The Fed will raise interest rates six more times, 0.25% each, for the rest of the year. This means that the Fed will raise interest rates at every meeting following this. and will keep the short-term interest rate at 1.75-2.00% later this year
David Kelly, an analyst at JPMorgan Asset Management, said the market responded to the Fed’s rate hike because it believed Normalizing monetary policy and controlling inflation will benefit the economy in the long run. In the short term, businesses in many sectors that rely on low interest rates might be affected.
Bank stocks surge as Fed raises interest rates Morgan Stanley was up 6.3 percent, JPMorgan was up 4.45 percent, Bank of America was up 3.11 percent, Citigroup was up 3.07 per cent and Wells Fargo was up 2.99 per cent.
Technology stocks rose Because investors are buying following the stock price has fallen heavily in the past. Micron Technology was up 8.97%, Netflix was up 4.01 percent, Microsoft was up 2.527%, Alphabet was up 3.16 percent, Meta Platforms was up 6.04%, and Apple was up 6.04%. 2.9%
Energy shares were lower following WTI oil fell for a third straight day, with Occidential Petroleum down 2.82 percent, Halliburton down 2.30 percent, Chevron down 0.38%. Xon Mobil was down 0.41%, ConocoPhillips shares were down 0.24%.
The market also gained positive following Russian Foreign Minister Sergei Lavrov said Russia and Ukraine were now close to reaching a partial peace talks. After Ukraine agreed to discuss neutral status. Lavrov’s remarks raised hopes that Russia would end the war in Ukraine.
Mikhailo Podolyak, adviser to Ukrainian President Volodymyr Zelensky, said President Zelensky may hold direct talks with Russian President Vladimir Putin in a few moments. today He believed that the only way to end this war was through direct negotiations between the two presidents.
