The stock market is jumping even with expectations of a significant interest rate hike

Stock market indexes rose more than 1% on Wednesday morning, their best gain in nearly two weeks, as investors waited for the Federal Reserve to announce interest rate policy.


Indicators are rebounding from panic selling. The Nasdaq Composite jumped 1.7% and Standard & Poor’s 1.5%. Small companies also participated, with the Russell 2000 index 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) is up 1.5% in an attempt to recover from a one-year low. coca cola (KO) rebounded from the 200-day moving average.

Volume was higher on the Nasdaq and lower on the New York Stock Exchange than at the same time on Tuesday. Advance stocks led decliners by more than 6-to-1 on the New York Stock Exchange and by 4-to-1 on the Nasdaq.

Fed set to raise prices

The Federal Reserve is closing its meeting today at 2 PM ET to make a decision on interest rates. Most market participants expect the Fed to raise the federal funds rate by three-quarters of a point, which would be the largest since 1994.

Overview of the US stock market today

index Code price win/loss % change
Dow Jones (0 DJIA) 30736.85 +372.02 +1.23
Standard & Poor’s 500 (0S&P5) 3789.76 +54.28 +1.45
Nasdaq (0NDQC) 11013.66 +185.31 +1.71
Contact 2000 (IWM) 172.09 +2.71 +1.60
defect 50 (fifty fifty) 30.02 +0.34 +1.15
Last update: 10:08 AM ET 6/15/2022

Futures markets pointed to a half-point rise until a hotter-than-expected consumer inflation report on Friday shifted interest rate expectations. With today’s rate hike almost a foregone conclusion, the stock market will be watching Federal Reserve Chair Jerome Powell’s comments about the next move. Could there be additional increases of 75 basis points?

With the Federal Reserve meeting 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% if you also exclude gasoline. All three measures missed the agreed Econoday estimates. Economists had expected total sales to rise 0.1% after rising 0.7% in April.

“The onslaught of rising prices, interest rates and a collapse in confidence overwhelmed US consumers in May and is likely to be the start of a tougher path ahead,” Sal Gutierreh, chief 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 sustained period of weakness in domestic demand and potential labor markets before breathing a sigh of relief on the inflation front.”

The 10-year Treasury yield fell 11 basis points to 3.37%, after accelerating higher in the past three sessions.

The European Central Bank is trying to protect weaker economies

In Europe, the European Central Bank announced plans to protect weaker eurozone countries from rising interest rates. The European Central Bank is also fighting inflation by raising interest rates, but some countries such as Italy are facing a greater burden because they are burdened with debt.

Germany’s DAX is up 1.5% in afternoon trading. The Paris CAC 40 is up 1.2% and the FTSE 100 in London is up 1.4%.

Innovator IBD 50 ETF (FFTY) rose 0.6%.

Steel Dynamics led the IBD 50 index with a 4% jump, extending the rebound off the 200-day line. Other IBD 50 industry stocks also performed well, including commercial metal (CMC), Alpha Metallurgical Resources (AMR) and coal producer Ramako resources (METC).

Almost all of the 11 S&P sector indices were higher, more than 1%. Only the SPDR power limit (XLE) is slightly lower. US crude fell 0.6% to $118.25 a barrel.

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