US equities turned around after the US Federal Reserve promised to keep interest rates low until the country’s economy improves further after the pandemic.
- S&P increased by 0.17 percent to 3,969.26 points
- Nasdaq rose 0.22 percent to 13,500.66 points
- The Dow Jones was up 0.55 percent to 33,005.27 points
Before the interest rate meeting, the indices were down, with technology-heavy Nasdaq in the forefront for fear of interest rate increases that could prevent financing of further growth.
Positive for technology stocks
On Wednesday, Governor Jerome Powell confirmed what he had previously signaled, namely that the zero interest rate should be kept to a minimum of 2023.
Rising interest rates have been an overhang for equities in recent weeks, especially the technology sector, which finances growth with a lot of debt. This has led to a shift from growth stocks to value stocks, and consequently pushed the Dow Jones and S&P 500 up.
The e-commerce company Ebay rises 2.75 percent. Amazon was up 1.42 percent.
Tesla puts on 3.65 percent.
The aircraft shares American United Airlines and Delta Airlines both gained more than 2 percent. The aircraft manufacturer Boeing was up 3.28 percent.
Shares in McDonalds rose 1.93 percent after the investment bank Deutsche Bank upgraded the share from hold to buy.
Bright growth prospects
The Federal Reserve increased its growth estimates for gross domestic product (GDP) from 4.2 percent to 6.5 percent for 2021.
Expectations for inflation also rose, and the Fed believes in 2.2 per cent this year. The central bank’s stated goal is to keep inflation at around 2 per cent in the longer term.
“This sounds like the perfect scenario for investors, and the market is responding very positively,” Michael Arone, investment strategist at State Street Global Advisors, told CNBC.
“Monetary policy will continue to be largely accommodating, almost regardless of what happens to interest rates and prices.”
Fear, gold, oil and interest
The VIX index, popularly called the fear index, fell 1.4 percent to 19.50.
The gold price rose 1.07 percent and an ounce went at closing time for 1,749.80 dollars.
North Sea oil fell 0.79 percent to $ 67.94 per barrel. fat.
The 3-month interest rate fell 0.3 basis points to 0.015 per cent.
The interest rate on the 2-year-old rose 1.4 basis points to 0.129 per cent.
The 10-year interest rate rose 1.3 basis points to 1.630 per cent.
The 30-year interest rate rose by 1.3 basis points to 2,381 per cent.
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