The stock market jumped on Wednesday after the Federal Reserve raised interest rates by 75 basis points for the second consecutive month in a row, with Fed Chair Jerome Powell hinting that the central bank could slow the pace of rate hikes later this year.
Stocks surged after the Fed’s announcement: The Dow Jones Industrial Average rose 1.4%, over 400 points, while the S&P 500 gained 2.6% and the tech-heavy Nasdaq Composite 4.1%.
In a widely expected move, the Federal Reserve once again raised interest rates by 75 basis points, similar to its last meeting in June, in a bid to combat high inflation which has hurt economic growth.
While Fed Chair Powell hinted that the central bank could slow the pace of rate increases later this year—if economic data improves, he also said that another 75 basis point increase is still on the table for September.
Shares of tech giants Microsoft and Alphabet both gained despite quarterly earnings and revenue coming in below expectations late on Tuesday, with analysts remaining optimistic about the long-term growth outlook for both companies.
Investors continued to assess the latest batch of second-quarter earnings: Out of more than 150 companies in the S&P 500 that have reported so far, roughly 70% have beaten analyst expectations, according to FactSet data.
Retail stocks, which tanked on Tuesday following a gloomy profit warning from Walmart, rebounded slightly on Wednesday, with the SPDR S&P Retail ETF, which tracks the sector, gaining nearly 1%.