The stock market rose further in afternoon trading as investors bought shares following the Fed's new interest-rate increase.
The Nasdaq rose to 3.9%. The S&P 500 climbed 2.5%. The Dow Jones Industrial Average and the Russell 2000 were also up, though at more moderate levels of 1.4% and 1.6%. Volume was lighter, with the Nasdaq seeing a dip of 8% compared with the same time on Tuesday, while NYSE volume saw a 14% drop in volume.
Index gains grew starting around 2:30 p.m. ET, about a half-hour after the rate increase was announced.
The yield on the 10-year Treasury fell 5 basis points to 2.74%.
What The Economic Numbers Tell Us
The widely anticipated hike of 75 basis points brings the Fed funds rate dramatically up from 0% in February to 2.25%. Starting with a modest tweak of 0.25% in March, a further 0.50% in May, monetary tightening followed a more aggressive path in June when a 75 basis point hike in the midst of rising crude oil prices and rampant inflationary pressures.
Today's 75 basis point follow up is accompanied by signs of inflation cooling as crude oil falls off its June peak and new home sales continue to taper down. A strong dollar that has hurt some corporate profits may also affect rate hikes going forward.
The Fed's rate hike also comes in the context of growth in new orders for durable goods, which came in at 1.9%, more than twice May's number and above Econoday estimates of a decline of 0.5%. Orders increased in transportation, computers and related categories.
Mixed Picture For Techs
Lam Research, which reports today after the close, may benefit from strong demand for semiconductor equipment offset by supply chain constraints. In Q1, the company reported earnings of $7.30 a share on revenue of $4 billion. The stock has been on a tear over the past three weeks and is back above its 50-day moving line. It has a Relative Strength Rating of 39 following a protracted decline.
The Technology Select Sector SPDR was up more than 4% in late trading, testing resistance around 140.
