NEW YORK (awp international) – The hope of a cautious and effective approach by the US Federal Reserve (Fed) to the upcoming rate hikes spurred Wall Street on Wednesday. The most important indices turned positive after the eagerly awaited monetary policy decisions by the Fed. There was a particularly clear upward trend for the cyclically sensitive technology stocks.
The leading index Dow Jones Industrial rose by 1.08 percent to 35,927.43 points. The market-wide S&P 500 rose 1.63 percent to 4709.85 points. The technology-heavy Nasdaq 100 recorded an increase of 2.35 percent to 16,289.60 points.
The Fed wants to get out of its extremely loose monetary policy faster than previously intended. On the one hand, the billion dollar purchases of securities such as government bonds are to be scaled back more quickly. On the other hand, in view of the high inflation, faster interest rate hikes are in prospect. For the coming year, the central bankers expect a total of three interest rate hikes of 0.25 percentage points each, according to new forecasts. So far, at most, an increase has been indicated. Investors now hope, according to stockbrokers, that the Fed can fight inflation without stifling economic growth.
“The Fed’s decisions are certainly at the upper end of the range of expectations, but they are not outside of expectations,” wrote portfolio manager Thomas Altmann of QC-Partners. For the stock markets, the most important thing at the moment is to have maximum planning security with regard to the monetary policy of the US Federal Reserve. And this planning security is now significantly greater after the interest rate decision in the middle of the week.
Economists Bernd Weidensteiner and Christoph Balz from Commerzbank added: “The view that inflation was mainly due to temporary effects and would therefore weaken rapidly in 2022 was no longer tenable. In order not to lose control over price developments , a swift end to the loose monetary policy is necessary. “
The economic data published at the start of trading confirmed the ongoing price pressure. In November, import prices rose faster than they had been in ten years.
Meanwhile, US retail sales increased only moderately in November in a month-on-month comparison. The sales of the department store chains even sagged significantly. The shares of industry representatives Macy? S and Kohl? S lost around 3 and 0.7 percent, respectively.
Positive news came from Eli Lilly: Thanks to the corona antibody business, the pharmaceutical company is becoming more optimistic for the current year. With this, the shares in the S&P 500 peak rose by a good ten percent.
In the wake of this, Pfizer’s papers continued their record hunt and ultimately won almost six percent. The pharmaceutical company had presented additional study data on the drug Paxlovid against Covid-19 the day before. According to Pfizer, the drug significantly reduces the risk of hospitalization or fatal disease in high-risk patients.
The euro benefited from the increased risk appetite of investors and was most recently listed at 1.1294 US dollars. The European Central Bank had previously set the reference rate at 1.1262 (Tuesday: 1.1309) dollars. The dollar cost 0.8879 (0.8843) euros. US Treasuries suffered from the prospect of a surprisingly rapid rise in key interest rates and eased somewhat. The futures contract for ten-year Treasuries fell 0.05 percent to 130.58 points. The yield on ten-year government bonds was 1.46 percent./la/men
— By Lutz Alexander, dpa-AFX —
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