US Federal Reserve Chairman Jerome Powell holds a news conference following the Fed’s announcement of a quarter-point interest rate hike in Washington.
by Stephen Culp and Sinéad Carew
NEW YORK (Reuters) – The New York Stock Exchange ended higher on Wednesday as the U.S. Federal Reserve (Fed) hiked interest rates as expected by 25 basis points, adopting a less aggressive monetary policy in its fight against inflation, which the central bank has noted is slowing down.
The Dow Jones Industrial Average gained 0.02 percent, or 6.92 points, to 34,092.96 points.
The broader S&P-500 gained 42.61 points, or 1.05%, to 4,119.21 points.
The Nasdaq Composite advanced for its part by 231.77 points (2.00%) to 11,816.32 points.
Although they fell in the wake of the Fed’s press release and then displayed some volatility, the main indices finally ended up with the speech of the head of the American central bank.
During a press conference, Jerome Powell noted that inflation was starting to subside but also indicated that he expected additional rate hikes.
Investors were particularly reassured following a question about the easing of financial conditions, commented Angelo Kourkafas, strategist at Edward Jones, in St. Louis.
“(Jerome Powell) had the opportunity to send a conservative message, he didn’t. He could have said the markets are rejoicing too much but he didn’t. Instead, he said there had already been a significant tightening,” he said.
The 25 basis point rate hike decided by the Fed was widely anticipated, after a year 2022 marked by significant successive hikes intended to stem the surge in inflation.
Among the main sectors of the S&P-500, only energy finished in the red (-1.9%), while technologies recorded the strongest increase (+2.3%).
Recent economic data indicates that inflation is running out of steam, while the Fed is also considering data on the state of the labor market to adjust its policy.
Wall Street is off to a strong start to the year, with the S&P-500 and Dow Jones posting January gains for the first time since 2019.
* The reminder of the session in Europe: [.EUFR]
* TO FOLLOW on Thursday:
(French version Jean Terzian)