US Stocks Closed Higher on Fed’s Rate Hike, European Stocks Rally.
London, Wednesday, 16 March 2022
US Markets Summary
Following Fed Chair Jerome Powell's assurance that Fed rises will not derail the economic recovery, US markets ended the day higher on Wednesday.
The Chair of the Federal Reserve stressed during the news conference that the US economy can endure tighter monetary conditions and that the risk of a recession is "not exceptionally substantial."
The Dow Jones Industrial Average rose nearly 500 points to 34,064, while the S&P 500 climbed 2.2 percent and the Nasdaq gained 3.8 percent.
The Dow had earlier lost all of its gains as the Federal Reserve raised the federal funds rate by 25 basis points, as expected, but suggested six more rate hikes this year and forecasted weaker growth and higher inflation.
European Markets Summary
As global mood was lifted by signs of progress in Russia-Ukraine talks, European equities markets jumped dramatically on Wednesday, with Germany's DAX rising nearly 4% to a two-week high above 14,450.
In exchange for a ceasefire and Russian departure, negotiators are contemplating a proposal for Ukraine to become a neutral country and accept constraints on its armed capabilities.
Gains were also fuelled by news that China will intervene to help markets and the economy.
BMW rose over 4% among single stocks, despite the German automaker lowering its operating profit expectations for 2022 owing to geopolitical concerns.
E.ON, Germany's largest energy company, rose after announcing that it anticipates core earnings to decrease to €7.6 billion in 2022, down from €7.9 billion in 2021, due to concerns about the Nord Stream 1 pipeline.
Meanwhile, following the closing bell, investors considered the possibility of a Federal Reserve interest rate hike.
U.S. Stock Market Indexes
S&P 500: + 95 points, or 2.24%, to end at 4,357
Nasdaq: + 488 points, or 3.77%, to finish the day at 13,436
Dow Jones: +518 points, or 1.55%, to 33,063
European Stock Market Indexes
STOXX Europe 600: +13.33 points, or 3.06%, to close at 448.45 points
FTSE 100 in London: + 116 points, or 1.62%, to finish at 7,291
DAX 30 in Germany: best performer of the day, +523 points, or 3.76%, to end the day at 14,440
CAC 40 in France: +233 points, or 3.68%, to 6,588
FTSE MIB 30 in Italy: + 785 points, or 3.34%, to close at 24,284
IBEX 35 in Spain: +144 points, or 1.75%, to 8,380
Ten-year U.S. Treasury note: +0.9% to 2.179%
Dollar index: -0.73% to 98.47
VIX volatility index: -10.6% to 26.67
Brent crude: $97.58 per barrel, down 2.3%
West Texas Intermediate: $94.80 per barrel, down 1.7%
Gold: +0.35% to $1,924 per ounce
Silver: +0.76% to $25.07 per ounce
Bitcoin: −189.90 (0.46%) at $40,933.50 as on 17 Mar, 01:09 UTC
Ethereum: −10.05 (0.36%) at $ 2,761.72 as on 17 Mar, 01:09 UTC
(Written and edited by: The Decision Maker)