NEW YORK (dpa-AFX) – After an unusually large interest rate hike, the US stock markets ended trading significantly higher on Wednesday. The leading index Dow Jones Industrial rose by 1.00 percent to 30,668.53 points – albeit after five trading days in a row with heavy losses. In the middle of the week, prices on the Nasdaq technology exchange rose even more sharply.
The US Federal Reserve raised interest rates sharply. It rose by 0.75 percentage points and is now in a range of 1.5 to 1.75 percent. Analysts had mostly expected a more moderate tightening of 0.50 percentage points. However, many observers had also predicted a larger step. However, the sharp rate hike may not become the new normal: “Don’t expect 75 basis point hikes to become common,” Powell said after the Fed’s rate meeting. That eased things up a bit on the stock markets, as did Powell’s suggestion that he wanted to avoid a recession.
There will probably not be a deep recession either, wrote economist Michael Heise from asset manager HQ Trust. The high order backlog in industry and strong post-corona demand in the service sector speak against such a move. Nevertheless, the economy in the USA is likely to weaken significantly and unemployment is likely to rise slightly. The big rate hike is a clear signal that the Fed is now pursuing its stability goal with vigour, after a long period of hesitation. “The American central bank is reacting late, but now violently, to the high inflation with an interest rate hike,” said the expert.
The market-wide S&P 500 rose by 1.46 percent to 3789.99 points. The tech-heavy Nasdaq 100
recovered much more strongly by 2.49 percent to 11,593.77 points.
The relief, according to Powell, was reflected in price gains in stocks, industries and sectors that are considered to be very interest-sensitive. This also includes large consumer stocks such as Amazon and Nike . The related sector gained 3 percent on Wednesday. The real estate sector, which is also considered very sensitive to interest rates, rose by 2.3 percent.
Among the individual stocks, Boeing fell with a price rally of almost ten percent. As on the previous day, they led the winners in the leading Dow index. Traders justified the gains with a media report that the airline China Southern Airlines carried out a test flight with the crisis jet 737 MAX.
Papers from Citigroup gained 3.5 percent. The investment bank forecast that sales of securities trading in the second quarter should increase by a quarter compared to the same period last year. Goldman Sachs rose in the wake of Citigroup by 2.7 percent.
Boston Scientific shares gained a good two percent. The medical technology manufacturer, which is valued at USD 52 billion on the stock exchange, takes over the majority of the South Korean MITech, which produces products for skin smoothing, among other things.
The Euro rallied after US rate hike and accompanying statements from Fed Chair Powell. It was trading at $1.0464 in late New York trade. The European Central Bank (ECB) had previously set the reference rate at 1.0431 (Tuesday: 1.0452) dollars, the dollar had cost 0.9587 (0.9568) euros.
The US bond market recovered. The futures contract for ten-year Treasuries (T-Note Future) rose by 1.13 percent to 115.70 points. In return, the yield on ten-year government bonds, which had risen to a high in more than eleven years the day before, fell to 3.31 percent./bek/he
— By Benjamin Krieger, dpa-AFX —
ISIN US2605661048 US6311011026 US78378X1072
AXC0334 2022-06-15/22:29
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