Wall Street tries to regain height after the Fed
The New York Stock Exchange ended up Wednesday at the end of a sawtooth session, after five consecutive days of decline, while the Fed announced an increase in its interest rates in line with market expectations. The US Federal Reserve raised interest rates for the first time since 1994 by 75 basis points, to a range of 1.50 to 1.75, and revised its economic outlook down and its inflation outlook.
Central bank president Jerome Powell said at a press conference that an interest rate hike of 50 or 75 basis points should take place in July, but that a 75 basis point hike should not not become the norm, which no doubt contributed to reassuring investors, as evidenced by the rebound in the equity and bond markets yesterday. The 2-year yield ended down 20 bps at 3.23%, while the 10-year yield ended down 16 bps at 3.32%.
All sectors of the S&P 500, except energy (-2.1%), recovered, with non-essential consumer spending in the lead (+3.0%), followed by the communication sector (+2 .4%) and real estate (+2.3%). The energy sector was hit by the drop in oil prices (-3.1%) and by the criticism leveled at major oil companies by Joe Biden, who said that refining margins well above normal ” in time of war” were not acceptable.
S&P 500 daily price chart – key levels